TargetCo has earnings per share of $3.90, 1.2 million shares, and a price per share of $38.10. If companies in the same industry as TargetCo are trading at multiples of 16 times earnings, what would be one estimate of an appropriate premium for TargetCo? One estimate of an appropriate premium for TargetCo is%. (Rrounded to one decimal place.)

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
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TargetCo has earnings per share of $3.90, 1.2 million shares, and a price per share of $38.10. If companies in the same industry as TargetCo are trading at multiples of 16 times earnings, what would be one estimate of an appropriate premium for TargetCo?
One estimate of an appropriate premium for TargetCo is%. (Rrounded to one decimal place.)
Transcribed Image Text:TargetCo has earnings per share of $3.90, 1.2 million shares, and a price per share of $38.10. If companies in the same industry as TargetCo are trading at multiples of 16 times earnings, what would be one estimate of an appropriate premium for TargetCo? One estimate of an appropriate premium for TargetCo is%. (Rrounded to one decimal place.)
Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 35% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $44 and Loki's was $50, what exchange ratio will Loki need to offer?
The ratio should be shares of Loki for every share of Thor. (Round to two decimal places.)
C
Transcribed Image Text:Loki, Inc. and Thor, Inc. have entered into a stock-swap merger agreement whereby Loki will pay a 35% premium over Thor's pre-merger price. If Thor's pre-merger price per share was $44 and Loki's was $50, what exchange ratio will Loki need to offer? The ratio should be shares of Loki for every share of Thor. (Round to two decimal places.) C
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