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EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table, Henry Company is considering merging with Mayer by
EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table, Henry Company is considering merging with Mayer by swapping 1.15 shares of its stock for each share of Mayer stock. Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging. a. Calculate the ratio of exchange in market price. b. Calculate the earnings per share (EPS) and price/earnings (P/E) ratio for each company. c. Calculate the price/earnings (P/E) ratio used to purchase Mayer Services. d. Calculate the post-merger earnings per share (EPS) for Henry Company. e. Calculate the expected market price per share of the merged firm. C Data table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Item Henry Company Mayer Services Earnings available for common stock $255,000 $80,000 Number of shares of common stock outstanding 110,000 15,000 Market price per share $37 $74 Print Done
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