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Both fiRms Are 100% Equity-fiNanced

Question 104

Multiple Choice

Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. What is the value of the post-merger firm following a cash acquisition? A) $255,000 B) $262,500 C) $337,500 D) $650,000 E) $672,525 What is the value of the post-merger firm following a cash acquisition?


A) $255,000
B) $262,500
C) $337,500
D) $650,000
E) $672,525

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