Holiday & Sons Is Being Acquired by Miller's, Inc

Multiple Choice

Holiday & Sons is being acquired by Miller's, Inc. for $20,000 worth of Miller's stock. Miller has 1,300 shares of stock outstanding at a price of $20 a share. Holiday has 1,000 shares outstanding with a market value of $18 a share. The incremental value of the acquisition is $2,000. What is the total number of shares in the new firm?

A) 1,000 shares
B) 1,300 shares
C) 1,500 shares
D) 2,000 shares
E) 2,300 shares