Tangy is attempting to acquire Target. Selected financial data is presented for both companies in the table below. Tangy has sufficient unissued shares to carry out the proposed merger. Item Tangy Target Co. Earnings Available for common stock $10,000,000 $1,000,000 Number of shares of common stock outstanding 1,000,000 50,000 Market price per share $100 $120 (a) Calculate the EPS of Tangy and Target before the merger. (b) If the ratio of exchange is 1.8, what will be the earnings per share of the merged company?
Tangy is attempting to acquire Target. Selected financial data is presented for both companies in the table below. Tangy has sufficient unissued shares to carry out the proposed merger. Item Tangy Target Co. Earnings Available for common stock $10,000,000 $1,000,000 Number of shares of common stock outstanding 1,000,000 50,000 Market price per share $100 $120 (a) Calculate the EPS of Tangy and Target before the merger. (b) If the ratio of exchange is 1.8, what will be the earnings per share of the merged company?
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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. Tangy is attempting to acquire Target. Selected financial data is presented for both companies in the table below. Tangy has sufficient unissued shares to carry out the proposed merger.
|
Item |
Tangy |
Target Co. |
|
Earnings Available for common stock |
$10,000,000 |
$1,000,000 |
|
Number of shares of common stock outstanding |
1,000,000 |
50,000 |
|
Market price per share |
$100 |
$120 |
(a) Calculate the EPS of Tangy and Target before the merger.
(b) If the ratio of exchange is 1.8, what will be the earnings per share of the merged company?
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