Alexandra's Is Being Acquired by David's,Inc

Alexandra's is being acquired by David's,Inc. for $20,000 worth of David's stock. Miller has 1,300 shares of stock outstanding at a price of $20 a share. Holiday has 1,000 shares outstanding with a market value of $18 a share. The incremental value of the acquisition is $2,000. What is the total number of shares in the new firm?

A) 1,000 shares
B) 1,300 shares
C) 1,500 shares
D) 2,000 shares
E) 2,300 shares

Correct Answer:

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