Brothers Coffee Co is planning on merging with Steve's Tea. Brothers Coffee will pay Steve's Tea shareholders the current value of their stock using sharesof Brothers Coffee as the form of payment. Brothers Coffee has 6500 shares outstanding at a market price of $12.50 per share. Steve's Tea has 3000 shares outstanding at a market price of $15.50 per share. The expected synergy created by the merger is $3200. What is the value of the merged firm (excludes cost of acquisition)? A)130,950 B) 127,750 C) 84450 D) 52,900 E) 124,400

Brothers Coffee Co is planning on merging with Steve's Tea. Brothers Coffee will pay Steve's Tea shareholders the current value of their stock using sharesof Brothers Coffee as the form of payment. Brothers Coffee has 6500 shares outstanding at a market price of $12.50 per share. Steve's Tea has 3000 shares outstanding at a market price of $15.50 per share. The expected synergy created by the merger is $3200. What is the value of the merged firm (excludes cost of acquisition)? A)130,950 B) 127,750 C) 84450 D) 52,900 E) 124,400

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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