Use the following information for the next two questions. Tangy is attempting to acquire Target. Tangy has sufficient authorized but unissued shares to carry out the proposed merger. Selected financial data is presented for both companies in the table below: 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 Calculate the EPS of Tangy and Target before the merger. 2. If the ratio of exchange is 1.8, what will be the earnings per share of the merged company?
Use the following information for the next two questions. Tangy is attempting to acquire Target. Tangy has sufficient authorized but unissued shares to carry out the proposed merger. Selected financial data is presented for both companies in the table below: 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 Calculate the EPS of Tangy and Target before the merger. 2. If the ratio of exchange is 1.8, what will be the earnings per share of the merged company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Use the following information for the next two questions.
Tangy is attempting to acquire Target. Tangy has sufficient authorized but unissued shares to carry out the proposed merger. Selected financial data is presented for both companies in the table below:
|
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 |
- Calculate the EPS of Tangy and Target before the merger.
2. If the ratio of exchange is 1.8, what will be the earnings per share of the merged company?
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