Mode Unico Acquisition. During the 1960s, many conglomerates were created by firms that were enjoying a high price/arings ratio (P/E). These firms the used their rigly valued stock to acquire other firms that had lower PE os, Sally in unrated domestic Industries Conglomerates went out of fashion during the 1980s when they lost their righ P risus making it more lo find other forms with lower PlEros to sure During the 1500s, the same acquisition strategy was possible for firms located in countries where high PE ratios were common compared to firms in other countries where low Pl. ratios were common. Consider the hypothetical firms in the pharmaceutical industry shown in the table below. Click on the icon to import the table into a spreadsheet) Modem American wants to acquire Mode Unica. It offers 5,500,000 shares of Modern American, with a current market value of $220,000,000 and a 10% premium on Modonico's shares, for all of Modo Unice's shares. Market value Total Company PE ratio of shares per share Earnings EPS Market Value 10,000,000 122.00 $10.000.000 $1.00 $220,000,000 Modern American 10.000.000 $10,000,000 $1.00 $440.000.000 Market value Number of shares Company Modounico Modern American Total Market Value $220,000,000 $440,000,000 Earnings $10,000,000 $10.000.000 $22.00 $44.00 10.000.000 a How many Whares would Modern American have ending where ton of Modonico? b. What would be the commoned earings of the combined Modern American and Modenice? e. Assuming the market continues to capture Modern America's comings at a P o f 44, what would be the new market value of Modern American? d. What would be the new earrings per share of Modern American? .. What would be the new market value of a share of Modem American 1. How much would Modern American's stock price increase 9. Assume that the markets a negative view of the squisition and lowers Modern America's Pret 30. What would be the new market price per share of stock? What would be its percentage loss