Firm A is being acquired by Firm B for $38,000 worth of Firm B stock. The incremental value of the acquisition is $7,400. Firm A has 2,500 shares of stock outstanding at a price of $22 a share. Firm B
Has 7,400 shares of stock outstanding at a price of $48 a share. What is the value per share of Firm
B after the acquisition?
A) $48.91
B) $50.98
C) $52.27
D) $55.43
E) $56.43

Question

Quizplus · Accepted Answer

The total value after the acquisition is the sum of Firm B's original value, the value of Firm A's shares, and the incremental value. This total is divided by the new total number of shares to find the new value per share.

Firm a Is Being Acquired by Firm B for $38,000