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Acquiring Company is considering the acquisition of Target Company in which Target Company would receive $36.00 for each share of its common stock. Acquiring Co.
Acquiring Company is considering the acquisition of Target Company in which Target Company would receive $36.00 for each share of its common stock. Acquiring Co. Target Co. $300,000 $500,000 Earnings available for common stock Number of shares of common stock outstanding Market price per share 500,000 $30.00 250,000 $27.00 If the transaction is using 100% of Acquiring Co.'s stock, the exchange ratio is The number of new shares issued by Acquiring Company is The post-merger EPS of the combined company is If the transaction is using 100% cash, all the cash is borrowed at an annual rate of 7.5%, and the tax rate is 40%, the post-merger earnings of the combined company are And the post-merger EPS of the combined company is
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