We invite you to participate in our Mergers and Acquisition Professional Certificate pop quiz. Challenge yourself with the question below!
1. PH Corporation announces that it will acquire Popcorn, Inc. for a combination of $6.00 per share in cash and 2 shares of PH stock for every share of Popcorn stock. There are 10 million shares of popcorn outstanding. PH stock trades for $13.75 on the day the acquisition is announced, and $13.00 on the day the transaction is completed. What is the purchase price paid by PH for popcorn?
a)$320 million
b)$335 million
c)$190 million
d)$327.5 million
Answer: A. Calculate the purchase price based on the value of the stock offered at the date the transaction closes. ($6.00 + 2 x $13.00) x 10 million shares.