Firm A is acquiring Firm B for $40,000 in cash.Firm A has a current market value of $66,000 while Firm B's current market value is $38,000.The synergy value from the acquisition is $2,500.What is the value of Firm A after the acquisition?

Question

Quizplus · Accepted Answer

The value of Firm A after the acquisition would be the sum of its current market value ($66,000) and the cash paid for the acquisition ($40,000), minus the synergy value ($2,500). 
Value of Firm A after acquisition = $66,000 + $40,000 - $2,500 = $103,500 
Therefore, the correct answer is D) $66,500, which represents Firm A's current market value.

Firm a Is Acquiring Firm B for $40,000 in Cash