Firm B is willing to be acquired by ﬁrm A at a price of $34 a share in either cash or stock. The incremental value of the proposed acquisition is estimated at $80,000. What are the beneﬁts of synergy associated with the acquisition of ﬁrm B by ﬁrm A?
A) $36,000
B) $40,000
C) $80,000
D) $120,000
E) $156,000

Question

Firm B is willing to be acquired by ﬁrm A at a price of $34 a share in either cash or stock. The incremental value of the proposed acquisition is estimated at $80,000.  What are the beneﬁts of synergy associated with the acquisition of ﬁrm B by ﬁrm A?
A) $36,000 
B) $40,000 
C) $80,000 
D) $120,000 
E) $156,000

Quizplus · Accepted Answer

The incremental value of the proposed acquisition is estimated at $80,000, indicating that the synergy benefits associated with the acquisition are $80,000. Therefore, the best choice is C.

Firm B Is Willing to Be Acquired by ﬁRm a at a Price