Question

State the formula for computing cost of merger when the merger is planned to be financed by shares

Answer 1

Answer:

In a merger, the boards of directors for two companies approve the combination and seek shareholders' approval. Post merger, the acquired company ceases to exist and becomes part of the acquiring company. For example, in 2007 a merger deal occurred between Digital Computers and Compaq, whereby Compaq absorbed Digital Computers.

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