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Alexandra's Is Being Acquired by David's for $75,000 Cash

Question 65

Multiple Choice

Alexandra's is being acquired by David's for $75,000 cash.The acquisition is being financed internally from retained earnings.Alexandra's currently has 3,000 shares of stock outstanding at a price of $24 a share.David's has 10,000 shares outstanding with a market value of $48 a share.The acquisition will create $4,000 of synergy.What is the value of David's after the acquisition?


A) $556,000
B) $409,000
C) $438,000
D) $521,000
E) $481,000

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