JLM has 6,000 shares of stock outstanding at a market price per share of $27.Hi-Tek has 30,000 shares outstanding that sell for $50 a share.By merging,$35,000 of synergy can be created.Hi-Tek is acquiring JLM for $200,000 worth of Hi-Tek stock.What is the post-merger value per share?
A)$50.00
B)$56.57
C)$49.91
D)$51.17
E)$48.83

Question

Quizplus · Accepted Answer

Number of shares needed for the acquisition = $200,000/$50 = 4,000 sharesNumber of post-merger shares = 30,000 + 4,000 = 34,000 sharesV_AB = (30,000 × $50)+ (6,000 × $27)+ $35,000 = $1,697,000Post-merger share value = $1,697,000/34,000 = $49.91

JLM Has 6,000 Shares of Stock Outstanding at a Market