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Net Income Shares Outstanding EPS PE Price Big Time 2021 (A) 2022 (F) 62,500,000 75,000,000 10,000,000 10,000,000 Net Income $ 6.25 8 50.00 $ 7.5

Net Income Shares Outstanding EPS PE Price Big Time 2021 (A) 2022 (F) 62,500,000 75,000,000 10,000,000 10,000,000 Net Income $ 6.25 8 50.00 $ 7.5 8 60.00 P/E Target Company 2022 (F) 30,000,000 Net Income Shares Outstanding EPS PE Price Consolidated (a) (b) (c) 8 (d) Big Time will puchase the target company at a PIE of 5 times the Target Company's 2022 (F) forecasted net income Big Time wit finance the deal in an all stock acquisition urung its stock valued at a PE of B (Stock Price year end 2021 is $50.00 if Big Time does not make the acquistion, it is forcasted to eam EPS of $750 and trade at a P/E of B, which would equate to $60.00 per share Should Big Tene make the acquision to enhance shareholder value? If you calculate the yolour colts (a), (b), (c), (d) comedy yoy will get the correct answer O Yes-because EPS would grow to $10 50 and at a PVE of 8 the stock would be valued at $04 00 O Ne because EPS would grow to $0 00 and at a PE of 8 the stock would be valued at $40.00 Yes because EPS would grow to $550 and at a FE of a the stock would be valued at $7000 Not enough information is provided O Yes-because EPS would grow to $8.08 and at a P/E of 8 the stock would be valued at $64 62

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