Company B and Company Ts financial conditions are given below:

	Company B	Company T
NE ($)	4,000,000	1,000,000
Shares outstanding (N)	400,000	200,000
Share price ($/share)	120	60

Company B plans to make an all cash offer to Company T with a premium of 30%.

It is expected that this acquisition will generate a perpetual net cash flow of $ 700,000 per year and Company B has a cost of capital of 12%.

The price per share for Company BT will be:

$123.3

$124.6

$125.6

$127.3

$130.3

The P/E of this new company BT will be:

7.8

8.4

8.6

8.8

9.2