Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows: Minnie CorporationMickey Corporation Total earnings

A merger between Minnie Corporation and Mickey Corporation is under consideration. The financial information for these firms is as follows:

Minnie CorporationMickey Corporation Total earnings $2,048,000 $2,944,000 Number of shares of stock outstanding 320,000 920,000 EPS $6.40 $3.20 P/E ratio 10X 20X Market price per share $64 $64

a. On a share-for-share exchange basis, what will the postmerger EPS be? (Round the final answer to 2 decimal places.)

Postmerger earnings per share $

b. If Mickey Corporation pays a 25 percent premium over the market value of Minnie Corporation, how many shares will be issued? (Do not round intermediate calculations.)

Shares issued shares

c. With the 25 percent premium, what will the postmerger EPS be? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Postmerger earnings per share $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions