Question
Buyer Cafe is attempting to acquire the Target Club. Certain financial data on these corporations are summarized in the following table. Item Buyer Cafe Target
Buyer Cafe is attempting to acquire the Target Club. Certain financial data on these corporations are summarized in the following table.
| Item | Buyer Cafe | Target Club |
| Earnings Available for common stock | $20,000 | $8,000 |
| Number of shares of common stock outstanding | 20,000 | 4000 |
| Market price per share | $12 | $24 |
| EPS | $1 | $2 |
Buyers Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 1.8, what will be the new earnings per share (EPS) of the merged firm?
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Quantitative Analysis For Management
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Hale
14th Edition
0137943601, 9780137943609
