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Actual Cost of Acquisition Using Company Stock

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Firm X is being acquired by Firm Y for $35,000 worth of Firm Y stock. The incremental value of the acquisition is $2,500. Firm X has 2,000 shares of stock outstanding at a price of $16 a share. Firm Y has 1,200 shares of stock outstanding at a price of $40 a share. What is the actual cost of the acquisition using company stock?

Please show your work to help me going forward with these.

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Solution Summary

Calculations are laid out to show how to find the actualy cost of acquisition using company stock.

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Actual cost of acquisition = Number of shares issued for acquisition × Value per share after the acquisition

Number of shares issued for acquisition= Acquisition Price ÷ Acquirer Current ...

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