Your company has earnings per share of $4.20. It has 1.3 million shares outstanding, each of which has a price of $38.80. You are thinking of buying TargetCo, which has earnings per share of $2.10, 1.4 million shares, and a price per share of $25.60. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. If you pay no premium to buy TargetCo, what will be your earnings per share after the merger? EPS = $2.93 EPS = $4.98 EPS = $3.78 %3D EPS = $12.42
Your company has earnings per share of $4.20. It has 1.3 million shares outstanding, each of which has a price of $38.80. You are thinking of buying TargetCo, which has earnings per share of $2.10, 1.4 million shares, and a price per share of $25.60. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. If you pay no premium to buy TargetCo, what will be your earnings per share after the merger? EPS = $2.93 EPS = $4.98 EPS = $3.78 %3D EPS = $12.42
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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![Your company has earnings per share of $4.20. It has 1.3 million shares outstanding, each of which has
a price of $38.80. You are thinking of buying TargetCo, which has earnings per share of $2.10, 1.4
million shares, and a price per share of $25.60. You will pay for TargetCo by issuing new shares. There
are no expected synergies from the transaction. If you pay no premium to buy TargetCo, what will be
your earnings per share after the merger?
EPS = $2.93
EPS = $4.98
EPS = $3.78
%3D
EPS = $12.42](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faab2e695-4b26-4ed9-809c-36c37e6ab9ea%2F2e33d933-872d-4b9e-a5b7-cbf4e3371046%2Fmot5pa5.jpeg&w=3840&q=75)
Transcribed Image Text:Your company has earnings per share of $4.20. It has 1.3 million shares outstanding, each of which has
a price of $38.80. You are thinking of buying TargetCo, which has earnings per share of $2.10, 1.4
million shares, and a price per share of $25.60. You will pay for TargetCo by issuing new shares. There
are no expected synergies from the transaction. If you pay no premium to buy TargetCo, what will be
your earnings per share after the merger?
EPS = $2.93
EPS = $4.98
EPS = $3.78
%3D
EPS = $12.42
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