Question
HungryHippo Inc. is considering the acquisition of two competitors: BigCrocs with EPS $2 and 50,000 shares trading at $3 each Pridelions with EPS $0.7 and
HungryHippo Inc. is considering the acquisition of two competitors:
BigCrocs with EPS $2 and 50,000 shares trading at $3 each
Pridelions with EPS $0.7 and 20,000 shares trading at $5 each
If HungryHippo Inc. has an EPS of $4 and 120,000 shares outstanding, which are trading at $12 each. Assume that HungryHippo Inc. issues shares to finance the acquisition
The goal of the HungryHippo Inc. is to have the highest EPS. Which competitor(s) should it buy?
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Step: 1
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Corporate Finance A Focused Approach
Authors: Michael C. Ehrhardt, Eugene F. Brigham
6th edition
1305637100, 978-1305637108
