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Pacific and Atlantic are all-equity firms. Pacific has 9,000 shares outstanding at a market price of...

Pacific and Atlantic are all-equity firms. Pacific has 9,000 shares outstanding at a market price of $49.80 a share. Atlantic has 4,500 shares outstanding at a price of $42.50 a share. Pacific is acquiring Atlantic for $210,000 in cash. The synergy of the acquisition is $31,000. What is the value of Atlantic to Pacific? $222,250 $234,410 $212,850 $206,400 $243,710

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Answer #1

Value of Atlantic to Pacific = Market value + Synergy Benefit

= 4,500*42.50 + 31,000

= $222,250

Hence, the answer is $222,250

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