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As a financial analyst at Bank of America, you are analyzing the impact of the merger and acquisition on a company's financial performance. You collected

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As a financial analyst at Bank of America, you are analyzing the impact of the merger and acquisition on a company's financial performance. You collected the following data Firm A Firm T Price per share $60.00 $15.00 Total earnings $600.00 $100.00 Share outstanding 200 80 Total Value $12,000.00 1,200.00 Suppose Company A will acquire Company T. Company A will offer two new share of A for every five shares of a. It investors are aware that there are no economic gains from the merger, what is the price-earninge ratio of A's stock after the merger? (sample answer: 27.60) b.Now suppose that the merger really does increase the value of the combined them by $1168, what in the price-earings ratio of A's stock after the merger? (sample answer: 27.60) c. Now suppose that the merger really does increase the value of the combined firms by $1155, What in the final merger premium in dollar does Company Apay to Company T (sample answer: $450,50) d. Now suppose that the merger really does increase the value of the combined firms by $1155, What is the initial merger premium promised in dollar does Company A pay to Company T (sample answer: $450.50)

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