Let's break down the problem and find the solutions step by step. ### Given: - **Cogrelli Cogs (Target):** - Shares outstanding = 165,000 - Price per share = \$43.85 - **Spacely Sprockets (Acquirer):** - Shares outstanding = 475,500 - Price per share = \$32.50 - **Acquisition Terms:** - Spacely Sprockets is acquiring Cogrelli Cogs for \$7,235,250 worth of Spacely Sprockets stock. (I have interpreted "5 7 , at 0 , 0 0 0" as \$7,235,250 because: 165,000 × \$43.85 = \$7,235,250.) --- ## a) **How many new shares of the acquirer's stock will be issued to pay for the merger?** To pay \$7,235,250 using Spacely Sprockets stock at \$32.50 per share: \[ \text{Number of new shares issued} = \frac{\text{Total purchase price}}{\text{Acquirer's share price}} \] \[ = \frac{\$7,235,250}{\$32.50} \] \[ = 222,623.08 \] **Rounding to the nearest whole share:** \[ \boxed{222,623} \] --- ## b) **How many shares will the acquirer have after the merger?** \[ \text{Total shares after merger} = \text{Existing shares} + \text{New shares issued} \] \[ = 475,500 + 222,623 \] \[ = 698,123 \] **Rounding is not necessary, but we keep the nearest whole share:** \[ \boxed{698,123} \] --- ### **Final Answers:** **a) Number of new shares issued:** \[ \boxed{222,623} \] **b) Total shares after the merger:** \[ \boxed{698,123} \] --- **Explanation Recap:** - The number of new shares is calculated by dividing the total purchase price (the value Spacely pays for Cogrelli) by the price per Spacely share. - The total number of shares after the merger is the sum of existing Spacely shares and new shares issued to Cogrelli shareholders.