How many of shares should boston offer in exchange

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Reference no: EM132020967

1. Boston Company is planning on merging with Marrymount Company. Boston currently has 400,000 shares of stock outstanding at a market price of $28 a share. Marrymount has 175,000 shares outstanding at a price of $31 a share. The merger will create $1,050,000 of synergy. How many of its shares should Boston offer in exchange for all of Marrymount s share if it wants its acquisition cost to be $5,700,000?

190,397

182,766

175,508

168,412

197,644

2. Merrimack Plastics, Inc. has a market value of $9,500 while Chelsmsford Chemicals has a market value of $6,200. Chelsmsford Chemicals is merging with Merrimack Plastics and expects the combined firm to have a market value of $16,200. If the current Merrimack Plastics shareholders obtain $9,850 of equity in the new firm, how much synergy was allocated to the Chelsmsford Chemicals shareholders?

$270

$340

$150

$420

Reference no: EM132020967

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