Wilson's has 5,000 shares of stock outstanding at a market price per share of $16.Albertsen's has 20,000 shares outstanding that sell for $25 a share.By merging,$15,000 of synergy can be created.Albertsen's is acquiring Wilson's for $85,000 worth of Albertsen stock.What is the post-merger value per share?
A)$25.43
B)$25.00
C)$25.75
D)$24.25
E)$25.12

Question

Quizplus · Accepted Answer

Number of shares needed for the acquisition = $85,000/$25 = 3,400 sharesNumber of post-merger shares = 20,000 + 3,400 = 23,400 sharesV_AB = (20,000 × $25)+ (5,000 × $16)+ $15,000 = $595,000Post-merger share value = $595,000/23,400 = $25.43

Wilson's Has 5,000 Shares of Stock Outstanding at a Market