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Assume that UMO, Inc. is planning to acquire MUR Corp. The acquisition is not expected to generate any synergies and UMO is planning to offer

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Assume that UMO, Inc. is planning to acquire MUR Corp. The acquisition is not expected to generate any synergies and UMO is planning to offer 2 new shares of its own for every 8 shares of MUR. The table below provides some additional details for both companies before the acquisition. Acquirer (UMO)Target (MUR) EPS $3.15 $1.25 Share price $47 $10 P/E ratio 15.00 8.00 Number of shares 450,000 375,000 Earnings $1,417,500 $468,750 Market value $21,262,500 $3,750,000 The EPS and P/E ratio of the combined company are closest to: EPS: $3.47; P/E: 12.15 EPS: $3.47; P/E: 13.26 EPS: $4.21; P/E: 12.25 EPS: $4.21; P/E: 14.75 None of the above

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