Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock exchange. Selected financial data for the two companies are shown next. An immediate synergistic earnings benefit of $3 million is expected in this merger, due to cost savings. Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Earnings per share Dividends per share Common stock (price per share) Wilson $84 $21 8 $ 2.625 $ 2.00 $34 Blanchard $74 $9.0 6 $ 1.50 $ 1.10 $15.00 Calculate the postmerger earnings per share if the Blanchard shareholders accept an offer of $19 per share in a stock-for-stock exchange. Round your answer to the nearest cent.
Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock exchange. Selected financial data for the two companies are shown next. An immediate synergistic earnings benefit of $3 million is expected in this merger, due to cost savings. Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Earnings per share Dividends per share Common stock (price per share) Wilson $84 $21 8 $ 2.625 $ 2.00 $34 Blanchard $74 $9.0 6 $ 1.50 $ 1.10 $15.00 Calculate the postmerger earnings per share if the Blanchard shareholders accept an offer of $19 per share in a stock-for-stock exchange. Round your answer to the nearest cent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Wilson Industries is considering the acquisition of the Blanchard Company in a stock-for-stock exchange. Selected financial data for the two companies are shown next.
An immediate synergistic earnings benefit of $3 million is expected in this merger, due to cost savings.
Sales (millions)
Earnings after taxes (millions)
Common shares outstanding
(millions)
Earnings per share
Dividends per share
Common stock (price per share)
$
+A
Wilson
$84
$21
8
$ 2.625
$ 2.00
$34
Blanchard
$74
$9.0
6
Calculate the postmerger earnings per share if the Blanchard shareholders accept an offer of $19 per share in a stock-for-stock exchange. Round your answer to the
nearest cent.
$1.50
$ 1.10
$15.00
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