Merchantile Exchange is being acquired by National Sales.The incremental value of the acquisition is $1,800.Merchantile Exchange has 1,500 shares of stock outstanding at a price of $18 a share.National Sales has 3,500 shares of stock outstanding at a price of $54 a share.What is the net present value of the acquisition given that the actual cost of the acquisition using company stock is $28,780?
A)$8
B)$11
C)$20
D)$37
E)$46

Question

Quizplus · Accepted Answer

Net present value = [(1,500 × $18) + $1,800] - $28,780 = $20

Merchantile Exchange Is Being Acquired by National Sales