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Albertsons Inc., is looking to buy Pam's Club Inc. in an all-stock deal. Synergies from the merger are expected to result in (additional) net
Albertsons Inc., is looking to buy Pam's Club Inc. in an all-stock deal. Synergies from the merger are expected to result in (additional) net income of $5,000 for the combined firm. The table below shows related financials of the two firms: + Albertsons Pam's Club Shares 10,000 5,000 Forward EPS 2.5 4.0 Pre-announcement Stock Price $20 $10 What is the maximum price/share that Albertson's should offer for Pam's Club in order to prevent the deal from being dilutive?
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To prevent the deal from being dilutive Albertsons should offer a maximum price per share for Pams C...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
