Question

cba corp is worth 15 million as a standalone firm. abc corp has offered 350000 shares valued at 50 each to acquire cba. after the annoucmen, however, the price of abc shares falls to 45. what is the cost of the merger

Answer 1

$.75 million

Step-by-step explanation:

Calculation for what is the cost of the merger

Cost of merger= $350,000 ×$45 - ($15 million)

Cost of merger= $15.75 - $15 million

Cost of merger= $.75 million

Therefore the cost of the merger will be $.75 million