b) Principal is acquiring Secondary Companies for $38,000 in cash. Principal has 4,500 shares of stock outstanding at a market price of $31 per share. Secondary has 1,600 shares of stock outstanding at a market price of $22 per share. Neither firm has any debt. The net present value of the acquisition is $2,400. What is the price per share of Principal after the acquisition?
b) Principal is acquiring Secondary Companies for $38,000 in cash. Principal has 4,500 shares of stock outstanding at a market price of $31 per share. Secondary has 1,600 shares of stock outstanding at a market price of $22 per share. Neither firm has any debt. The net present value of the acquisition is $2,400. What is the price per share of Principal after the acquisition?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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