Question

Taylor's Hardware is acquiring The Corner Store for $50,000 in cash. Taylor's has 2,200 shares of stock outstanding at a market value of $18 a share. The Corner Store has 1,300 shares of stock outstanding at a market price of $27 a share. Neither firm has any debt. The incremental value of the acquisition is $2,300. What is the value of Taylor's Hardware after the acquisition?

Answer 1

$27,000

Step-by-step explanation:

Taylor share $39,600

(2,200 * 18)

Add: Corner share Acquired $35,100

(1,300 * 27)

Add: incremental value $2,300

Less: Cash paid $50,000

Value of Taylor's Hardware $27,000

after the acquisition