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Firm B's 1 million shares of stock currently sell for $12 each, but firm A is...

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Finance

Firm B's 1 million shares of stock currently sell for $12 each,but firm A is preparing a tender offer of $18 per share. Firm Aestimates the NPV of the merger to be $5 million. What percentageof the merger gains will be captured by firm B's stockholders?

Multiple Choice

  • 54.55%

  • 33.33%

  • 50.00%

  • 66.67%

Answer & Explanation Solved by verified expert
3.7 Ratings (386 Votes)
Solution Answer is 1st option 5455 Working Notes Percentage of the merger gains will be captured by firm Bs stockholders Gain captured by firms B shareholders Overall gain due to merger Gain captured by firms B shareholders Value paid    See Answer
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