Firm a Is Planning on Merging with Firm B

Firm A is planning on merging with Firm B. Firm A will pay Firm B's stockholders the current value of their stock in shares of Firm A. Firm A currently has 3,000 shares of stock outstanding at a market price of $15 a share. Firm B has 1,000 shares outstanding at a price of $10 a share. What is the value of the merged firm?

A) $25,000
B) $45,000
C) $55,000
D) $60,000
E) None of these

Correct Answer:

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