ABBA NABA Before Merger ABBA Before Merger After Merger $ 5.00 20.00 8.00 15,000 EPS $...

Question

Question

Answer 1

Answer #1

NABA is acquiring ABBA

Given price per share of NABA of $30

and market capitalization of ABBA = price per share * no of shares = 15000* 20 = $300000

NABA can issue new shares = 300000/30 = 10000 new shares

So total number of shares post merger = 30000+ 10000 = 40000 shares

and Share price post merger would be NABBA's shared price of $30

So MArket cap = 30*40000

= 1200000

So correct answer is option E

Answer 2

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