Firm a Is Being Acquired by Firm B for $35,000

Firm A is being acquired by Firm B for $35,000 worth of Firm B stock. The incremental value of the acquisition is $2,500. Firm A has 2,000 shares of stock outstanding at a price of $16 a share. Firm B
Has 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of the
Acquisition using company stock?

A) $34,750
B) $34,789
C) $35,000
D) $35,289
E) $35,500