Acquiring Company is considering the acquisition of Target Company in a share-for share transaction in which Target
Question:
Acquiring Company is considering the acquisition of Target Company in a share-for share transaction in which Target Company would receive $50.00 for each share of its common stock. Acquiring Company does not expect any change in its P/E multiple after the merger.
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Using the preceding information about these two firms and showing your work, calculate the following:
a. Purchase price premium.
b. Share-exchange ratio.
c. New shares issued by Acquiring Company.
d. Total shares outstanding of the combined companies.
e. Postmerger EPS of the combined companies.
f. Premerger EPS of Acquiring Company.
g. Postmerger share price.
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Related Book For 
Mergers Acquisitions And Other Restructuring Activities
ISBN: 9780128016091
9th Edition
Authors: Donald DePamphilis
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