First Inc. is acquiring Second Inc. for $4.5 million in cash. First has 250,000 shares of stock outstanding at a market price of $30 a share. Second has 160,000 shares of stock outstanding at a market price of $15 a share. Neither firm has any debt. The net present value of the acquisition is $850,000. What will the price of First Inc. be, after the acquisition?

Answer rating: 100% (QA)

To determine the price of First Inc after the acquisition we need to consider the impact of the acqu... View the full answer