Bidder Co has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $40. It plans to acquire Target Co, which has earnings per share of $2,1 million shares outstanding, and a price per share of \$25. Bidder Co will pay for Target Co by issuing new shares. There are no expected synergies from the transaction. a. If Bidder Co pay no premium to buy Target Co, what's its earnings per share after the deal completion? ( 2 marks) b. If Bidder Co's offer represents a 10% premium to buy Target Co, what's its earnings per share after the deal completion? Compare your results from a) and b) and explain the source of difference for earnings per share after the deal completion. (4 marks) c. In b), the actually premium may be different from 20% after the announcement, due to the change of share price. Calculate the actual premium. Assume that the takeover will occur with certainty and all market participants know this on the announcement of the takeover. (3 marks) Bidder Co has earnings per share of $4. It has 1 million shares outstanding, each of which has a price of $40. It plans to acquire Target Co, which has earnings per share of $2,1 million shares outstanding, and a price per share of \$25. Bidder Co will pay for Target Co by issuing new shares. There are no expected synergies from the transaction. a. If Bidder Co pay no premium to buy Target Co, what's its earnings per share after the deal completion? ( 2 marks) b. If Bidder Co's offer represents a 10% premium to buy Target Co, what's its earnings per share after the deal completion? Compare your results from a) and b) and explain the source of difference for earnings per share after the deal completion. (4 marks) c. In b), the actually premium may be different from 20% after the announcement, due to the change of share price. Calculate the actual premium. Assume that the takeover will occur with certainty and all market participants know this on the announcement of the takeover