Asked by
Sydney Bodnar
on Dec 08, 2024Verified
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 value of Winslow Co. to Ferrier, Inc.?
A) $24,000
B) $25,000
C) $26,000
D) $28,000
E) $29,000
Incremental Value
The additional value created by a specific action or decision, compared to what would have occurred without it.
Shares Outstanding
The total number of shares of a corporation's stock that are currently owned by shareholders, including those held by institutional investors and restricted shares.
Market Price
The latest price point at which an asset or service can be acquired or disposed of.
- Become proficient in understanding the financial dimensions and calculations entailed in mergers and acquisitions.
- Evaluate the modes of settlement (cash or equity) in the context of mergers and acquisitions, focusing on their influence on corporate value.
Verified Answer
TC
Learning Objectives
- Become proficient in understanding the financial dimensions and calculations entailed in mergers and acquisitions.
- Evaluate the modes of settlement (cash or equity) in the context of mergers and acquisitions, focusing on their influence on corporate value.