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 per share of the merged firm?

A) $10.00
B) $15.00
C) $16.25
D) $20.00
E) $20.50

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free