1. Firm X is being acquired by Firm Y for $35,000 cash which is being provided by retained earnings. The synergy of the acquisition is $5,000. Firm X has 2,000 shares of stock outstanding at a price of $16 a share. Firm Y has 10,200 shares of stock outstanding at a price of $46 a share. What is the value of Firm Y after the acquisition?

$534,750

$471,200

$435,000

$468,900

$535,500

2. Jay’s has a market value of $3,600 and believes that if it acquires Benny’s in a stock transaction the combination of the new firm will be worth $6,000 given the expected synergy of $200. If Jay’s wants to keep 75 percent of the synergy for itself, what should be the value of the stock it issues to Benny’s?

$2,050

$2,250

$2,150

$2,000

$2,500