Mergers and Acquisitions The predator, Distance Company will acquire all of the outstanding stock of Full-Time Company through an exchange of stock. Distance is offering K 65.00 per share for Full-Time company. The following is the Financial information for the two companies: Note: The share exchange ratio is equal to Price Offered by Acquiring Firm / Market Price of Acquiring Firm Distance Full-Time Net Income K 50,000 K 10,000 Shares Outstanding 5,000 2,000 Earnings per Share K 10.00 K 5.00 Market Price of Stock K 150.00 P / E Ratio 15 Required: i. Calculate shares to be issued by Romer ii. Calculate Combined EPS iii. Calculate P / E Ratio Paid iv. Calculate maximum price before dilution of EPS v. Compare the P / E Ratio Paid to current P / E Ratio vi. In less than a page and with proper citation, explain the difference between purchase and pooling of interests accounting for mergers. What is the effect on cash flows of the choice of accounting method on EPS?