Series 79 practice questionmediumMarket Premiums
A company is acquired for $72 million. Its unaffected stock price reflects a market capitalization of $60 million. What is the acquisition premium paid?
- A12%
- B10%
- C25%
- D20%✓ Correct answer
Explanation
Why D — 20%
The premium is ($72M - $60M) / $60M = 20%. 10%, 12%, and 25% reflect errors in the premium formula.
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