Question Big Fish Inc. is acquiring Little Fish Ltd. Big Fish's share price is $10 and Little Fish's share price is $2. Both firms have 1 million shares outstanding. Big Fish expects a discounted synergistic value of $1 million from the merging of operations of the two firms. If Big Fish pays cash of $2.2 million to Little Fish's shareholders, what is the value of Big Fish Inc. is acquiring Little Fish Ltd. Big Fish's share price is $10 and Little Fish's share price is $2. Both firms have 1 million shares outstanding. Big Fish expects a discounted synergistic value of $1 million from the merging of operations of the two firms. If Big Fish pays cash of $2.2 million to Little Fish's shareholders, what is the value of the merged firm? 0 $13,000,000 O $10,800,000 O $11,000,000 $12,000,000 0 $10,000,000 eBook & Resources

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Transcribed Image Text: Big Fish Inc. is acquiring Little Fish Ltd. Big Fish's share price is $10 and Little Fish's share price is $2. Both firms have 1 million shares outstanding. Big Fish expects a discounted synergistic value of $1 million from the merging of operations of the two firms. If Big Fish pays cash of $2.2 million to Little Fish's shareholders, what is the value of the merged firm? 0 $13,000,000 O $10,800,000 O $11,000,000 $12,000,000 0 $10,000,000 eBook & Resources
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Transcribed Image Text: Big Fish Inc. is acquiring Little Fish Ltd. Big Fish's share price is $10 and Little Fish's share price is $2. Both firms have 1 million shares outstanding. Big Fish expects a discounted synergistic value of $1 million from the merging of operations of the two firms. If Big Fish pays cash of $2.2 million to Little Fish's shareholders, what is the value of the merged firm? 0 $13,000,000 O $10,800,000 O $11,000,000 $12,000,000 0 $10,000,000 eBook & Resources
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Market value of Big Fish's Share $       1,00,00,000($10*1000000) Marketvalue of Littel Fish's Share $          20,00,000($2*1000000) Synergistic value $&# ... See the full answer