Kyle's company has earnings per share of $8. It has 1 million shares? outstanding, each of which has a price of $24. Kyle is thinking of buying? TargetCo, which has earnings per share of $4?, 1 million shares? outstanding, and a price per share of $21. Kyle will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. Complete parts? (a) through? (d) below.

a. If Kyle pays no premium to buy? TargetCo, what will his earnings per share be after the? merger?

b. suppose Kyle offers an exchange ratio such that, at current pre-announcement share prices for both firms, the pffer represents a 20% premiuum to but TargetCo. what will kyles earnings per share be after the merger?

c. what explains the change in earnings per share in part a? are Kyle's shareholders any better or worse off?

d. what will Kyle's price-earnings (P/E) ratio be after the merger (if Kyle pays no premium)? how does this compare to Kyle's (P/E)ratio before the merger? How does this compare to TargetCo's pre-merger (P/E) ratio?