Question

Ginormous Oil entered into an agreement to purchase all of the outstanding shares of Slick Company for $60 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of liabilities on the balance sheet of Slick Co. was $1.46 billion. What was the cost of this acquisition to the shareholders of Ginormous Oil?A. $1.46 billionB. $3.46 billionC. $4.92 billionD. $6.38 billionE. $8.38 billionF. None of the above.

Answer 1

C. $4.92 billion

Step-by-step explanation:

Acquisition cost refers to the cost a company pays for assets such as shares or fixed assets like machinery. In this case, the company paid $60 * 82 million, being $4.92 Billion.