Answer:
$34,789
Explanation:
Worth of stocks = $35,000
Incremental value of the acquisition = $2,500
Stock outstanding of Firm X = 2,000
Price per share of Firm X = $16
Stock outstanding of Firm Y = 1,200
Price per share of Firm Y = $40
Now,
Number of shares issued = 35,000 ÷ 40
or
= 875 shares
Value after merger = (Value of Stock x + Value of Stock Y + Synergy)
= (1200 × 40) + (2000 × 16) + 2500
or
= $82,500
Number of Stock Outstanding after merger = ( 1,200 + 875 )
= 2,075
Thus,
Value per share after merger = $82500 ÷ 2,075
= 39.759
Therefore,
Actual cost of acquisition
= Value per share after merger × Number of shares issued
= 875 × $39.759
= $34,789
