Question

Pacific and Atlantic are all-equity firms. Pacific has 9,000 shares outstanding at a market price of $49.80 a share. Atlantic has 4,500 shares outstanding at a price of $42.50 a share. Pacific is acquiring Atlantic for $210,000 in cash. The synergy of the acquisition is $31,000. What is the value of Atlantic to Pacific?

		$222,250
		$234,410
		$212,850
		$206,400
		$243,710

Answer 1

Value of Atlantic to Pacific = Market Value + Synergy

= 4,500*42.50 + 31,000

= $222,250

Hence, the answer is $222,250