Asked by
Biana Desai
on Dec 08, 2024
Verified
Tuesday's and Thursday's are all-equity firms. Tuesday's has 5,600 shares outstanding at a market price of $28 a share. Thursday's has 4,500 shares outstanding at a price of $42 a share. Thursday's is acquiring Tuesday's. The incremental value of the acquisition is $4,200. What is the value of Tuesday's to Thursday's?
A) $130,200
B) $152,600
C) $156,800
D) $161,000
E) $165,400
Incremental Value
The additional financial worth generated as a result of a specific action or decision.
All-Equity Firms
Companies that finance their operations without any debt, relying solely on equity.
Shares Outstanding
The total number of a company's shares that are held by shareholders, including restricted shares owned by the company’s officers and insiders.
- Understand the financial implications and calculations involved in mergers and acquisitions.
- Analyze the methods of payment (cash or stock) in mergers and acquisitions and their impact on the value of the involved firms.
Verified Answer
JD
Learning Objectives
- Understand the financial implications and calculations involved in mergers and acquisitions.
- Analyze the methods of payment (cash or stock) in mergers and acquisitions and their impact on the value of the involved firms.