Question
Assume the following financial data for the Wolf Corporation and Lamb Enterprises. Wolf Corporation Lamb Enterprises Total earnings $125,000 $500,000 Number of shares of stock
Assume the following financial data for the Wolf Corporation and Lamb Enterprises.
| Wolf Corporation | Lamb Enterprises | |||
| Total earnings | $125,000 | $500,000 | ||
| Number of shares of stock outstanding | 100,000 | 500,000 | ||
| EPS | $1.25 | $1.00 | ||
| P/E ratio | 16X | 20X | ||
| Market price per share | $20.00 | $20.00 | ||
a. If all the shares of the Wolf Corporation are exchanged for shares of the Lamb Enterprises on a share-for-share basis, what will postmerger EPS be for Lamb Enterprises? Use an approach similar to Table 204. (Round the final answer to 2 decimal places.)
Postmerger EPS $
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Valuation, Measuring And Managing The Value Of Companies
Authors: Tim Koller, Marc Goedhart, David Wessels
7th Edition
1119611865, 9781119611868
