EPS, PE$,$ and MergersThe shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here:

Flannery Stultz

Price$-$earnings ratio $6\mathrm{.}3512\mathrm{.}70$

Shares outstanding $73,000\mathrm{.}0073,000\mathrm{.}00$

Earnings $$230,000$ $$690,000$

Flannery$$s shareholders will receive one share of Stultz stock for every three shares they hold in Flannery.

a$.$ What will the EPS of Stultz be after the merger? What will the PE ratio be if the NPV of the acquisition is zero?

b$.$ What must Stultz feel is the value of the synergy between these two firms? Explain how your answer can be reconciled with the decision to go ahead with the takeover.