Smith-Miler Merger
Smith Enterprises can acquire Miller, Inc for $250,000 in either cash or stock. Both companies are 100% equity financed. The synergy value of the acquisition for Smith is $35,000. Currently Smith has 25,000 shares outstanding which trade at $29 a share, whereas Miller has 15,000 shares outstanding that trade at $14 a share.
-What is the net value of the acquisition to Smith if cash is used?
A) $245,000
B) -$5,000
C) -$250,000
D) $5,000
Correct Answer:
Verified
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