Question
DePaul industries has an EPS of $6 and 5M shares outstanding. Its closing price yesterday was $35 per share. Loyola industries EPS of $4 and
DePaul industries has an EPS of $6 and 5M shares outstanding. Its closing price yesterday was $35 per share.
Loyola industries EPS of $4 and has 3M shares outstanding. Its closing price yesterday was $25 per share.
Both industries, after the close of market announced a friendly all-stock acquisition where DePaul industry has agreed to acquire each share of Loyola industry at 20% premium.
1)How many new shares must DePaul industry issue to complete the transaction?
2)What will the eps of the combined entity be after the merger?
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Financial Markets And Institutions An Introduction To Risk Management Approach
Authors: Anthony Saunders, Marcia Cornett
3rd Edition
0073250937, 9780073250939
