Cassandra's Boutique has 2,100 shares outstanding at a market price per share of $26. Sally's has 3,000 shares outstanding at a

Question

3 years ago

12

Cassandra's Boutique has 2,100 shares outstanding at a market price per share of $26. Sally's has 3,000 shares outstanding at a

market price of $41 a share. Neither firm has any debt. Sally's is acquiring Cassandra's for $58,000 in cash. The incremental value of the acquisition is $2,500. What is the value of Cassandra's Boutique to Sally's?
A. $26,000
B. $27,600
C. $57,100
D. $58,200
E. $60,500

Business

1 answer:

Schach [20] · Answer 1 · 2021-12-21T17:41:45+03:00

Schach [20]3 years ago

7 0

Answer:

E. $60,500

Explanation:

The value of Cassandra's Boutique to Sally's = Cash paid for the acquisition + Incremental cost = $58,000 + $2,500 = $60,500

Therefore, the value of Cassandra's Boutique to Sally's is $60,500.