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