When valuing purchase versus lease

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Reference no: EM132019034

1. Which one of these can be ignored when valuing a purchase versus a lease?

tax shield from depreciation

investment outlay for the asset

changes in operating costs related to the acquired asset

lease payments

taxes

2. 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

Reference no: EM132019034

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