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Firms a and B Are Each Worth $50 Million, but Generate

Question 40

Multiple Choice

Firms A and B are each worth $50 million, but generate a $20 million gain when merged.If the cost of the merger was $5 million, how much did Firm A pay for Firm B?


A) $50 million
B) $55 million
C) $60 million
D) $65 million cost = cash - PVB
$5 million = cash - $50 million

Correct Answer:

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