Question
Group Co. currently has 4,000 shares outstanding each sold for $100, whereas, Intel Toc. has 3.000 shares outstanding each sold for $50. The earnings per
Group Co. currently has 4,000 shares outstanding each sold for $100, whereas, Intel Toc. has 3.000 shares outstanding each sold for $50. The earnings per share for Group Co. and Intel Inc. is $11 per hare. Group Co decides to acquire Intel Ine. by offering three new shares of Group Co. for every six shares of Intel Inc. Assume that the merger increases the sale of the combined films by $30.000.
1. What is the Earning Per Share for Group Co. after merger?
2. What is the price earnings ratio of Group Co. after the merger?
3. What is the cost of the merger? *
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