Asked by
Brian Moran
on Dec 08, 2024
Verified
Calipers, Inc. is acquiring Johnson Warehouse for $47,000 in cash. Calipers has 2,700 shares of stock outstanding at a market value of $32 a share. Johnson Warehouse has 3,200 shares of stock outstanding at a market price of $14 a share. Neither firm has any debt. The net present value of the acquisition is $1,800. What is the value of Caliper's after the acquisition?
A) $84,600
B) $86,000
C) $110,000
D) $124,800
E) $133,000
Acquisition
The process of acquiring control of another company or business entity through purchase or merger.
Shares Outstanding
The total number of shares of a company that have been issued and are currently owned by shareholders.
Market Value
The current price at which an asset or company can be bought or sold in the marketplace.
- Obtain insight into the economic effects and precise arithmetic involved in mergers and acquisitions.
- Identify the principles behind incremental value and net present value in mergers and acquisitions settings.
Verified Answer
KA
Learning Objectives
- Obtain insight into the economic effects and precise arithmetic involved in mergers and acquisitions.
- Identify the principles behind incremental value and net present value in mergers and acquisitions settings.