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Castles in the Sand currently sells at a price - earnings multiple of 2 4 . The firm has 2 million shares outstanding and sells

Castles in the Sand currently sells at a price-earnings multiple of 24. The firm has 2 million shares outstanding and sells at a price per share of $60. Firm Foundation has a P/E multiple of 12, has 1 million shares outstanding, and sells at a price per share of $30.
If Castles acquires the other firm by exchanging one of its shares for every two of Firm Foundation, what will be the earnings per share of the merged firm?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
What will be the price per share for Castle?
Note: Do not round intermediate calculations.
What would be Firm Foundation's value of stock post merger?
Note: Do not round intermediate calculations. Enter your answer in millions.
What should be the P/E of the new firm if the merger has no economic gains?
Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Calculate Castles price per share if the market does not realize that the P/E ratio of the merged firm ought to differ from Castles premerger ratio.
Note: Do not round intermediate calculations.
How are the gains from the merger split between shareholders of the two firms if the market is fooled as in part (e)?
Note: Enter your answers in millions.

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