Series 79 practice questioneasyPrecedent Transactions - Premium Calculation
Company A acquires Company B for $50 per share. Company B's share price was $40 immediately before the deal. What is the deal premium as a percentage of the pre-deal price?
- A10%
- B20%
- C25%✓ Correct answer
- D50%
Explanation
Why C — 25%
The premium is ($50 - $40) / $40 = 25%, so the correct answer is 25%, which is option C.
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