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Firm a Has a Value of $100 Million, and B

Question 43

Multiple Choice

Firm A has a value of $100 million, and B has a value of $60 million. Merging the two would allow a cost savings with a present value of $20 million. Firm A purchases B for $65 million. How much do firm A's shareholders gain from this merger?


A) $30 million
B) $20 million
C) $15 million
D) $5 million

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