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News Express has 26,200 shares outstanding at a market price of $33.30 a share. Nu-News has 15,000 shares outstanding at a price of $54 a share. The News Express is acquiring Nu-News. Both firms are all-equity financed. The incremental value of the acquisition is $2,500. What is the value of Nu-News to News Express?

a. $804,960
b. $812,500
c. $874,960
d. $869,960

Respuesta :

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Answer:

The value of Nu-News to News Express b. $812,500

Explanation:

Consider the following formula to calculate the Value of Nue.

Value of Nu-News to News Express = Share Price*Number of Shares + Incremental value of the acquisition = 54 * 15,000 + 2,500 = 812,500.

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