1. What is the share exchange ratio?

2. How many new shares will be issued by Acquiring Company?

3. What is the post-merger EPS of the combined company?

4. What is the post-merger share price of the combined company?

5. If the purchase is using 100% cash and all the cash is borrowed at an annual rate of 8%, what is post-merger EPS of the combined company, assuming the tax rate is 40%?

Acquiring Company is considering the acquisition of Target Company in a stock for stock transaction in which Target Company would receive $50.00 for each share of its common stock. The Acquiring Company does not expect any change in its pricelearnings multiple after the merger. Acquiring Co. $150,000 Target Co. $30,000 Earnings available for common stock 60,000 20,000 Number of shares of common stock outstanding Market price per share $60.00 $40.00 Using the information provided above on these two firms and showing your work, calculate the following