Question
Hello Need help please I need help with the section starting with Earnings per share of combined company in year 1 including synergies, Table 14
Hello Need help please
I need help with the section starting with Earnings per share of combined company in year 1 including synergies, Table 14 and the comparison of eps with and without synergies. (section in red ink) Thank you
Determine the EPS of the combined company in Year 1 if these synergies occur.
Assume an exchange ratio of 0.45.
Use a table to illustrate your calculations and conclusion.
Compare this EPS (including synergies) to the EPS of the combined company without the synergies.
What percentage increase in EPS is this?
Propose your recommended price for Favorite shares and the exchange ratio for the merger based on this price.
Note that Mr. Favorite will not agree to the merger without some premium over the stated $15 price per share.
Justify your recommendation.
NEED HELP FROM THIS POINT DOWN.... THE TOP PORTION IS COMPLETED AND PROVIDED FOR INFORMATIONAL PURPOSES.
Pre-transaction Earnings Per Share (EPS) and P/E Ratios Exchange Ratio Exchange Ratios with Premium Prices Post-merger Shares Outstanding Based on 0.45 Exchange Ratio Post-merger Income Statement and Earnings per Share Free Cash Flow from Synergies Required Rate of Return Weighted Average Cost of Capital (WACC) Terminal Year Value Note: Data from FIN490_Chapter 23 Integrative Case Problem Mergers and Acquisitions Net Present Value of Synergies Note: Data from FIN490_Chapter 23 Integrative Case Problem Mergers and Acquisitions Earnings per Share (EPS) of Combined Company in Year 1, Including Synergies Here, provide an explanation of the earnings per share of the combined companies in year 1 , including synergies. (1-2 sentences). Include a table Table 14 Post-merger Income Statement and Earnings per Share, Including Synergies rrgers and Acquisitions. Admiral Foods Corporation Balance Sheet (in Millions of Dollars) Admiral Foods Corporation Income Statement (in Millions of Dollars) \begin{tabular}{lr} \hline Sales & $1,261.0 \\ Less: Expenses, excluding depreciation & 1,118.2 \\ Less: Depreciation & 36.0 \\ Eamings before intenst and taxas & $106.8 \\ Less: Intenst & 12.8 \\ Famings before taxes & $94.0 \\ Less: Taxes (40\%) & $37.6 \\ Eanings after taxas & $56.4 \\ \hline \end{tabular} Favorite Food Systems, Inc. Balance Sheet (in Millions of Dollars) Favorite Food Systems, Inc. Income Statement (in Millions of Dolars) Additional Information \begin{tabular}{lcc} \hline & Adminal Foods Corporation & Favorite Food Systems \\ \hline Dividends per share & $2.50 & $0.60 \\ Common stock (rica per shan) & $50 & $15 \\ \hline \end{tabular} Pre-transaction Earnings Per Share (EPS) and P/E Ratios Exchange Ratio Exchange Ratios with Premium Prices Post-merger Shares Outstanding Based on 0.45 Exchange Ratio Post-merger Income Statement and Earnings per Share Free Cash Flow from Synergies Required Rate of Return Weighted Average Cost of Capital (WACC) Terminal Year Value Note: Data from FIN490_Chapter 23 Integrative Case Problem Mergers and Acquisitions Net Present Value of Synergies Note: Data from FIN490_Chapter 23 Integrative Case Problem Mergers and Acquisitions Earnings per Share (EPS) of Combined Company in Year 1, Including Synergies Here, provide an explanation of the earnings per share of the combined companies in year 1 , including synergies. (1-2 sentences). Include a table Table 14 Post-merger Income Statement and Earnings per Share, Including Synergies rrgers and Acquisitions. Admiral Foods Corporation Balance Sheet (in Millions of Dollars) Admiral Foods Corporation Income Statement (in Millions of Dollars) \begin{tabular}{lr} \hline Sales & $1,261.0 \\ Less: Expenses, excluding depreciation & 1,118.2 \\ Less: Depreciation & 36.0 \\ Eamings before intenst and taxas & $106.8 \\ Less: Intenst & 12.8 \\ Famings before taxes & $94.0 \\ Less: Taxes (40\%) & $37.6 \\ Eanings after taxas & $56.4 \\ \hline \end{tabular} Favorite Food Systems, Inc. Balance Sheet (in Millions of Dollars) Favorite Food Systems, Inc. Income Statement (in Millions of Dolars) Additional Information \begin{tabular}{lcc} \hline & Adminal Foods Corporation & Favorite Food Systems \\ \hline Dividends per share & $2.50 & $0.60 \\ Common stock (rica per shan) & $50 & $15 \\ \hline \end{tabular}
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