The floral shoppe and maggies flowers are all-equity firms


The Floral Shoppe and Maggie's Flowers are all-equity firms. The Floral Shoppe has 1,600 shares outstanding at a market price of $20 a share. Maggie's Flowers has 2,550 shares outstanding at a price of $28 a share. Maggie's Flowers is acquiring The Floral Shoppe for $36,000 in cash. The incremental value of the acquisition is $3,300. What is the net present value of acquiring The Floral Shoppe to Maggie's Flowers?

$-700

$-1,700

$300

$2,300

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Financial Management: The floral shoppe and maggies flowers are all-equity firms
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