DEF stockholders are paid the current market value of their ﬁrm in the form of ABC stock. Both ﬁrms are 100% equity-ﬁnanced. The total earnings of the combined ﬁrm are $77,000. What is the number of shares in the new ﬁrm?
A) 28,600
B) 29,000
C) 30,400
D) 32,000
E) 32,500

Question

DEF stockholders are paid the current market value of their ﬁrm in the form of ABC stock. Both ﬁrms are 100% equity-ﬁnanced. The total earnings of the combined ﬁrm are $77,000.  What is the number of shares in the new ﬁrm?
A) 28,600 
B) 29,000 
C) 30,400 
D) 32,000 
E) 32,500

Quizplus · Accepted Answer

The Answer of DEF stockholders are paid the current market value of their ﬁrm in the form of ABC stock. Both ﬁrms are 100% equity-ﬁnanced. The total earnings of the combined ﬁrm are $77,000.  What is the number of shares in the new ﬁrm?
A) 28,600 
B) 29,000 
C) 30,400 
D) 32,000 
E) 32,500

DEF Stockholders Are Paid the Current Market Value of Their