Question

You own 1200 shares of Newstar Financial stock, currently trading for $57 per share. You are offered a deal where you can exchange these stocks for 1100 shares of Amback Financial Group stock, currently trading at $60 per share. What is the value of this trade, if you choose to make it?

Answer 1

Answer:

-$2,400

Explanation:

1,200 shares price per share is $57.

So, the total amount:

= $57 × 1,200

= $68,400

Value of trade if offer is accepted = $60 per share

Total share issued in offer is 1,100

Therefore total value = 1,100 × $60 per share

                                    = $66,000

So, the net value of trade:

= $66,000 - $68,400

= -$2,400