Buyer Cafe is attempting to acquire the Target Club. Certain financial data on these corporations are summarized in the following table. Item Buyer Cafe Target Club Earnings Available for common stock $20,000 $8,000 Number of shares of common stock outstanding 20,000 4000 Market price per share $12 $24 EPS $1 $2 Buyer’s Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 1.8, what will be the new earnings per share (EPS) of the merged firm?
Buyer Cafe is attempting to acquire the Target Club. Certain financial data on these corporations are summarized in the following table. Item Buyer Cafe Target Club Earnings Available for common stock $20,000 $8,000 Number of shares of common stock outstanding 20,000 4000 Market price per share $12 $24 EPS $1 $2 Buyer’s Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 1.8, what will be the new earnings per share (EPS) of the merged firm?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Buyer Cafe is attempting to acquire the Target Club. Certain financial data on these corporations are summarized in the following table.
|
Item |
Buyer Cafe |
Target Club |
|
Earnings Available for common stock |
$20,000 |
$8,000 |
|
Number of shares of common stock outstanding |
20,000 |
4000 |
|
Market price per share |
$12 |
$24 |
|
EPS |
$1 |
$2 |
Buyer’s Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 1.8, what will be the new earnings per share (EPS) of the merged firm?
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