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Atlas Corporation is acquiring Bazan, Inc. for $1,670,000 in cash. Atlas has 80,000 shares of stock...

Atlas Corporation is acquiring Bazan, Inc. for $1,670,000 in cash. Atlas has 80,000 shares of stock outstanding at a market value of $55 a share. Bazan has 38,000 shares of stock outstanding at a market price of $39.60 a share. Neither firm has any debt. The net present value of the acquisition is $182,000. What is the price per share of Atlas after the acquisition? $57.28 $56.13 $55.44 $54.21 $58.04

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Answer #1

Price per share after acquisition = Price per share before acquisition + NPV of acquisition/Number of shares

= 55 + 182000/80,000

= $57.275

i.e. $57.28

Hence, the answer is $57.28

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