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2. Whipple Industries is interested in acquiring Charmin'. Whipple has sufficient authorized but unissued shares to carry out the proposed merger. The exchange ratio is
2. Whipple Industries is interested in acquiring Charmin'. Whipple has sufficient authorized but unissued shares to carry out the proposed merger. The exchange ratio is .4 and financial data on these companies is listed below: Item Whipple Charmin Sales $150,000,000 $30,000,000 Earnings available for Common Stock $25,000,000 $3,500,000 # of shares of common Sock Outstanding 8,000,000 2,000,000 Earnings per Share $3.13 $1.75 Dividends per Share $1.50 $0.75 Market Price Per Share $40.00 $19.50 a. How many new shares of stock will Whipple have to issue to make the proposed merger? b. If the earnings for each firm remain unchanged, what will the post-merger EPS be? C. How much, effectively, has been earned on behalf of each of the original shares of Charmin' Stock? d. How much, effectively, has been earned on behalf of each of the original shares of Whipple stock
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