Firm A and Firm B are all-equity firms. Firm A has 10,000 shares outstanding at a market price of $25 a share. Firm B has 7,500 shares outstanding at a price of $10 a share. Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $14,500. What will the price per share be of the post-merger firm if payment is made in stock? $27.30 O $25.53 O $26.32 $25.00 O $25.38

Firm A and Firm B are all-equity firms. Firm A has 10,000 shares outstanding at a market price of $25 a share. Firm B has 7,500 shares outstanding at a price of $10 a share. Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $14,500. What will the price per share be of the post-merger firm if payment is made in stock? $27.30 O $25.53 O $26.32 $25.00 O $25.38

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 12P

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