Consider the Following Premerger Information About a Bidding Firm (Buyitall

Multiple Choice

Consider the following premerger information about a bidding firm (Buyitall Inc.) and a target firm (Tarjay Corp.) .Assume that neither firm has any debt outstanding. Buyitall has estimated that the present value of any enhancements that Buyitall expects from acquiring Tarjay is $2,600.What is the NPV of the merger assuming that Tarjay is willing to be acquired for $28 per share in cash?

A) $400
B) $600
C) $1,800
D) $2,200
E) $2,600
F) None of the above.