Use the following information to answer the question. Round your answers if necessary, to two decimal places.
Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed.
Firm A: Number of Shares = 10,000 ; Price per Share = $25.00
Firm B: Number of Shares = 10,000 ; Price per Share = $10.00
What is the NPV of acquiring firm A when stock financing is used?
NPV = (market value of firm B + synergy benefits) - cost of aquisition
cost of aquisition = 78,750
Market value of B = 10,000*10 = 100,000
synergy benefits = 15,000
NPV = (100,000 + 15,000) - 78750
= $36,250
Use the following information to answer the question. Round your answers if necessary, to two decimal...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 : Price per...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the question. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the questions. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the questions. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share = $25.00 Firm B: Number of Shares = 10,000 ; Price per...
Use the following information to answer the questions. Round your answers if necessary, to two decimal places. Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares = 10,000 ; Price per Share - $25.00 Firm B: Number of Shares = 10,000; Price per Share...
Firm A can acquire firm B for $78,750 in cash or with stock worth $78,750 priced at its current price of $25 per share of stock. The synergy value of the deal is $15,000. Both firms are 100% equity financed. Firm A: Number of Shares - 10,000; Price per Share - $25.00 Firm B: Number of Shares - 10,000; Price per Share - $10.00 a) How many shares of A, at their current price, will be given to firm B's...