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lara31 [8.8K]
3 years ago
14

Firm A is being acquired by Firm B for $35,000 worth of Firm B stock. The incremental value of the acquisition is $2,500. Firm A

has 2,000 shares of stock outstanding at a price of $16 a share. Firm B
has 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of
the acquisition using company stock ?
a) $34,750 b) $34,789 c) $35,000 d) $35,289 e) $35,500
Business
1 answer:
LekaFEV [45]3 years ago
4 0

Answer:

option (b) $34,789

Explanation:

Data provided in the question:

Worth of Firm A = $35,000

Incremental value of the acquisition = $2,500

Number of shares of Firm A outstanding = 2,000

Price of Firm A shares = $16 per share

Number of shares of Firm B outstanding = 1,200

Price of Firm B shares = $40 per share

Now,

Number of shares issued = Worth of Firm A ÷ Price per share of Firm B

= $35,000 ÷ $40

= 875 shares

Value per share after merger

= [ (1,200 × $40) + ( 2,000 × $16 ) + $2,500 ] ÷ [ 1,200 + 875 ]

= $82,500 ÷ 2,075

= $39.759

Therefore,

The Actual cost of acquisition

= Number of shares issued × Value per share after merger

= 875 × $39.7588

= $34788.95 ≈ $34,789

Hence,

The answer is option (b) $34,789

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Answer:

Days in sales inventory= 64.511 days

Explanation:

Inventory turnover rate is defined as the number of times a company sells its inventory within a give period usually a year. The higher the number of turnovers the higher sales volume and profit.

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To calculate the number of days Tater and Pepper’s inventory stay on the premises we use the formula

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2 years ago
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Answer:

The answer is A. developing a strategic vision, mission and values.

Explanation:

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In formulating and executing strategy, the first step to take is to develop a strategic vision, mission and values for the organisation.

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3 0
3 years ago
Which relationship is possible when two tables share the same primary key?
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Explanation:

3 0
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Alain Mire files a single tax return and has adjusted gross income of $314,000. His net investment income is $43,000. What is th
ratelena [41]

Answer:

$1,634

Explanation:

The computation of the additional tax to be paid is shown below:

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Answer:

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d. Financial units (dollars or other currency)

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