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What is the npv of the acquirer

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Question - Company A has a market value of $200 million and two million shares outstanding. Company B has a market value of $50 million and one million shares outstanding. Company A is deciding to acquire Company B. The managers of Company A have determined that the value of the combined firms will be $300 million. Company A expects to pay a $30 million premium for Company B. Assume that capital markets are efficient and that there is a 100 percent probability the deal will be closed. What is the NPV of the acquirer (Company A)?

a. $30 million

b. $20 million

c. $300 million

d. $100 million

d. $50 million

Reference no: EM133176990

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