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Both Firms Are 100% Equity-Financed

Question 67

Multiple Choice

Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. What is the NPV of the acquisition if cash is used? A) $2,500 B) $5,000 C) $7,500 D) $10,000 E) None of these. What is the NPV of the acquisition if cash is used?


A) $2,500
B) $5,000
C) $7,500
D) $10,000
E) None of these.

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