Firm a Is Planning on Merging with Firm B

Firm A is planning on merging with Firm B.Firm A currently has 2,300 shares of stock outstanding at a market price of $20 a share.Firm B has 750 shares outstanding at a price of $15 a share.The merger will create $200 of synergy.How many of its shares should Firm A offer in exchange for all of Firm B's shares if it wants its acquisition cost to be $12,000?

A) 598
B) 607
C) 600
D) 584
E) 593

Correct Answer:

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