What is the maximum price per share firm

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Reference no: EM132015402

Firm A is considering a merger/acquisition with Firm B. Based on the following data, what is the maximum price per share Firm A would pay to acquire Firm B in a tender offer?

Firm A:

Market value of debt: $1 million

Market value of equity: $6 million

Number of shares: 0.1 million

Estimated total firm value based on value-based management model if the merger takes place: 8 million

Firm B:

Market value of debt: $4 million

Market value of equity: $6 million

Number of shares: 0.4 million

Estimated total firm value based on value-based management model if the merger takes place: 12 million

a. $25.3

b. $24.9

c. $22.5

d. $23.3

Reference no: EM132015402

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