Cassandra's has 6,100 shares outstanding at a market price per share of $24.Adrian's has 3,500 shares outstanding at a market price of $56 a share.Neither firm has any debt.Adrian's is acquiring Cassandra's for $155,000 in cash.The synergy of the acquisition is $22,500.What is the value of Cassandra's to Adrian's?

Question

Quizplus · Accepted Answer

To find the value of Cassandra's to Adrian's, we need to first calculate the market value of Cassandra's shares.

Market value of Cassandra's shares = Number of shares outstanding x Market price per share 
= 6,100 x $24 
= $146,400

Next, we need to add the synergy value to this calculated value to get the total value of Cassandra's to Adrian's.

Total value of Cassandra's to Adrian's = Market value of Cassandra's shares + Synergy value 
= $146,400 + $22,500 
= $168,900

Therefore, the best choice is C, $168,900.

Cassandra's Has 6,100 Shares Outstanding at a Market Price Per