Firm b has 1000 shares outstanding at a price of 10 a share


Firm A is planning on merging with Firm B. Firm A will pay Firm B's stockholders the current value of their stock in shares of Firm A because no synergy will be created. Firm A currently has 3,000 shares of stock outstanding at a market price of $15 a share. Firm B has 1,000 shares outstanding at a price of $10 a share. What is the value of the merged firm?

A) $50,000 B) $25,000 C) $60,000 D) $55,000 E) $45,000

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Financial Management: Firm b has 1000 shares outstanding at a price of 10 a share
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