Asked by
Tatum Hughes
on Dec 08, 2024
Verified
Winslow Co. has agreed to be acquired by Ferrier, Inc. for $25,000 worth of Ferrier stock. Ferrier currently has 1,500 shares of stock outstanding at a price of $21 a share. Winslow has 1,000 shares outstanding at a price of $22. The incremental value of the acquisition is $4,000. What is the merger premium per share?
A) $1
B) $2
C) $3
D) $4
E) $5
Merger Premium
The additional amount paid over the current market value of a company during a merger or acquisition.
Shares Outstanding
The total number of a company's shares that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.
Market Price
The price at which an asset or service is currently being traded in the marketplace.
- Acquire knowledge of the financial aspects and numerical analyses required in mergers and acquisitions.
- Compute the premiums paid during mergers and comprehend their importance in the context of mergers and acquisitions.
Verified Answer
JS
Learning Objectives
- Acquire knowledge of the financial aspects and numerical analyses required in mergers and acquisitions.
- Compute the premiums paid during mergers and comprehend their importance in the context of mergers and acquisitions.