Consider the Following Premerger Information About a Bidding Firm (Firm

Multiple Choice

Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm T) .Assume that neither firm has any debt outstanding. Firm B has estimated that the value of the synergistic benefits from acquiring Firm T is $2,500.What is the NPV of the merger assuming that Firm T is willing to be acquired for $28 per share in cash?

A) $100
B) $400
C) $1,800
D) $2,200
E) $2,600