Hanover Tires is being acquired by Better Tires for $89,000 worth of Better Tires stock.Hanover Tires has 2,500 shares of stock outstanding at a price of $36 a share.Better Tires has 6,000 shares outstanding with a market value of $23 a share.The incremental value of the acquisition is $4,200.How many new shares of stock will be issued to complete this acquisition?
A)2,472 shares
B)3,016 shares
C)3,133 shares
D)3,870 shares
E)3,987 shares

Question

Quizplus · Accepted Answer

Number of shares issued = $89,000/$23 = 3,870 shares

Hanover Tires Is Being Acquired by Better Tires for $89,000