Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can I get help with this question please? Required: Complete the below table for the merged firm. How many shares of World Enterprises are exchanged

Can I get help with this question please?

Required:

  1. Complete the below table for the merged firm.
  2. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle?
  3. What is the cost of the merger to World Enterprises?
  4. What is the change in the total market value of the World Enterprises shares that were outstanding before the merger?

image text in transcribed

World Enterprises is determined to report earnings per share of $275. It therefore acquires the Wheelrim and Axle Company. You are glven the following facts: World Enterprises $ 2.2e $ 44.ee 28 140,000 $ 3e8,eee $6,160.ece Earnings per share Price per share Price-earnings ratio Number of shares Total earnings Total market value Merged Firm $2.75 2 ? Wheelrin and Axle 2.30 $ 23.ee 10 160.ece $ 368,000 $3,680,eee There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises Issues just enough of its own shares to ensure its $2.75 earnings per share objective. Required: a. Complete the below table for the merged firm. b. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? c. What is the cost of the merger to World Enterprises? d. What is the change in the total market value of the World Enterprises shares that were outstanding before the merger? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Complete the below table for the merged firm. (Do not round intermediate calculations. Round "Price per share" to 2 decimal places, "Price-earnings ratio" to 1 decimal place, and the other final answers to the nearest whole number.) Earnings per share Price per share Price-earnings ratio Number of shares Total earnings Total market value World Wheelrim and Enterprises Axle Merged Firm $ 2.2015 2.30 $ 2.75 $ 44 $ 23.00 20 10 140,000 160,000 $ 308,000 $ 388,000 $ 6,160,000 $ 3,680,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The New CFO Financial Leadership Manual

Authors: Steven M. Bragg

3rd Edition

0470882565, 978-0470882566

More Books

Students also viewed these Finance questions