Answer:
The following multiple choices are missing:
a. $40,000
b. $42,500
c. $48,500
d. $47,500
e. $50,000
The correct option is D,$47,500 as shown in the calculation in the explanation section below
Step-by-step explanation:
The value of Firm A after the acquisition is the market value of the original Firm A before acquisition plus the value of the firm acquired-that its net present value.
Value of Firm A=A's shares*price per share+net present value of acquisition
A's shares is 2,500
price per share is $18
Net present value of acquisition is $2,500
Value of firm A=(2500*$18)+$2,500
=$45000 +$2500
=$47,500
The value of the combined entity is $47,500