The following data on a merger are given: $\begin{array} { l c l l }
& \text { Firm A } & \text { Firm B}&\text { Firm AB } \
\text { Price per share } & \$ 100 & \$ 10 & \
\text { Total earnings } & \$ 500 & \$ 300 & \
\text { Shares outstanding } & 100 & 40 & \
\text { Total value } & \$ 10.000 & \$ 400 & \$ 11.000
\end{array}$ Firm A has proposed to acquire Firm B at a price of $20 per share for Firm B's stock.Calculate the gain from the merger.
A)$600
B)$150
C)$550
D)$700

Question

The following data on a merger are given: $\begin{array} { l c l l } 
& \text { Firm A } & \text { Firm B}&\text {  Firm AB } \
\text { Price per share } & \$ 100 & \$ 10 & \
\text { Total earnings } & \$ 500 & \$ 300 & \
\text { Shares outstanding } & 100 & 40 & \
\text { Total value } & \$ 10.000 & \$ 400 & \$ 11.000
\end{array}$ Firm A has proposed to acquire Firm B at a price of $20 per share for Firm B's stock.Calculate the gain from the merger.
A)$600
B)$150
C)$550
D)$700

Quizplus · Accepted Answer

The gain from the merger is calculated as the difference between the total value of Firm AB and the sum of the total values of Firm A and Firm B before the merger. The total value of Firm AB is $11,000, and the sum of the total values of Firm A and Firm B before the merger is $10,000 + $400 = $10,400. Therefore, the gain from the merger is $11,000 - $10,400 = $600.

The Following Data on a Merger Are Given Firm a Has Proposed to Acquire Firm B at a l