ABC and XYZ are all-equity firms.ABC has 1,750 shares outstanding at a market price of $20 a share while XYZ has 2,500 shares outstanding at a price of $28 a share.ABC is acquiring XYZ for $75,000 in cash.The incremental value of the acquisition is $8,000.What is the net present value of acquiring XYZ to ABC?
A) $2,000
B) $3,000
C) $6,000
D) $4,000
E) $8,000
Correct Answer:
Verified
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