What is the net present value of acquiring mccheese to bigby

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1. BigBy and McCheese are all-equity firms. BigBy has 10,000 shares outstanding at a market price of $45 a share while McCheese has 5,000 shares outstanding at a price of $32 a share. BigBy is acquiring McCheese for $167,000 in cash. The incremental value of the acquisition is $12,500. What is the net present value of acquiring McCheese to BigBy?

$7,400

$8,100

$5,500

$6,600

$6,300

2. Pratt and Dansville are all-equity firms. Pratt has 4,000 shares outstanding at a market price of $60 a share. Dansville has 3,500 shares outstanding at a price of $36 a share. Pratt is acquiring Dansville for $132,000 in cash. The synergy of the acquisition is $10,000. What is the value of Dansville to Pratt?

$143,000

$136,000

$151,000

$147,000

$125,000

Reference no: EM132019056

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