As an analyst, you need to calculate the combined earnings of a proposed merger between the Chocolatte and Bute Peanutt firms. Assume the merger is financed by debt of $20 million at 5%. The tax rate is 20%.

Chocolatte NI 34

Bute Peanutt NI 18

All numbers are in millions. Answer to one decimal place ##.#

As an analyst, you need to calculate the maximum number of acquirer shares that can be offered for each target share without diluting the forecasted acquirer's EPS. The tax rate is 20%. No debt is issued for this merger.

Acquirer NI 34

Acquirer shrs 5

Target NI 64

Target shrs 7

All numbers are in millions. Note you will have to compute EPS before answering this question.

Answer to one decimal place, ##.#