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Suppose You Have the Following Information Concerning an Acquiring Firm

Question 8

Multiple Choice

Suppose you have the following information concerning an acquiring firm (A) and a target firm (B) . Neither firm has any debt. The incremental value of the acquisition is estimated to be $250,000. Firm B is willing to be acquired for $540,000 worth of Firm A's stock. Suppose you have the following information concerning an acquiring firm (A) and a target firm (B) . Neither firm has any debt. The incremental value of the acquisition is estimated to be $250,000. Firm B is willing to be acquired for $540,000 worth of Firm A's stock. What is the NPV of acquiring Firm B? A) The NPV is negative B) $94,588 C) $102,120 D) $118,156 E) $162,015 What is the NPV of acquiring Firm B?


A) The NPV is negative
B) $94,588
C) $102,120
D) $118,156
E) $162,015

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