The Cookie Shoppe and Sweet Treats Are All-Equity Firms

The Cookie Shoppe and Sweet Treats are all-equity firms. The Cookie Shoppe has 3,400 shares outstanding at a market price of $31 a share. Sweet Treats has 6,100 shares outstanding at a price of $42 a share. Sweet Treats is acquiring the Cookie Shoppe for $107,500 in cash. The incremental value of the acquisition is $2,900. What is the net present value of the acquisition?

A) $1,600
B) $800
C) $700
D) −$2,100
E) −$300