Final answer:
The market price of a combined firm post-merger is determined by a complex analysis of both companies' financials and the synergy potential, not just by adding the individual stock prices together.
Step-by-step explanation:
The market price of a combined firm after one company purchases another is not automatically determined by the stock prices of the two separate companies prior to the merger. A merger involves a complex analysis of both companies' assets, liabilities, earnings, and synergy potential. The post-merger stock price could be influenced by efficiency gains, market expansion, increased market share, and strategic value. Simply adding the current prices of each company's stocks does not provide an accurate or meaningful post-merger stock price. Factors such as expected cost savings, growth rates, the terms of the purchase, and the market's reaction to the merger are all taken into consideration, which requires comprehensive financial analysis beyond just combining stock prices.
In the given examples of buying and selling stocks like Face-book, Nike, and Panda Express, calculating the profit involves subtracting the initial purchase amount and transaction fees from the sale proceeds. However, regarding the acquisition of one company by another, the resulting firm's stock price doesn't just sum the earlier individual prices; it reflects the new entity's anticipated financial future.