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. How many shares will be given to ﬁrm B's stockholders in the stock-ﬁnanced deal?
A) 3,000
B) 3,300
C) 3,667
D) 4,250
E) 5,762

Question

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.  How many shares will be given to ﬁrm B's stockholders in the stock-ﬁnanced deal?
A) 3,000 
B) 3,300 
C) 3,667 
D) 4,250 
E) 5,762

Quizplus · Accepted Answer

The Answer of 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.  How many shares will be given to ﬁrm B's stockholders in the stock-ﬁnanced deal?
A) 3,000 
B) 3,300 
C) 3,667 
D) 4,250 
E) 5,762

Both ﬁRms Are 100% Equity-ﬁNanced