Net Income Shares Outstanding EPS PE Price Big Time 2021 (A) 2022 (3) 62,500,000 75,000,000 10,000,000 10,000,000 Net Income 6.25 M 2.5 50.00 5 60.00 Py Target Company 2022 (F) 30,000,000 Consolidated Net Income (a) Shares Outstanding (b) EPS (0) PE Price Target Company's 2022 (F) focated net income Big Time will finance the deal in an a Big Time will puchise the target company at a PE of 5 times the stock action using its stock valued at PE of & (Slock Price year end 2021 is $60 00 g Teme does not make the acquestion, as cinted to con EPS of 17.50 and trade at a E of b, which would egate to 500.00 p share Should thig Time make the acon to enhance shareholder value? you cute the yow cats (4) h ( (b) conecty yoy will get the conect answer O Yes because EPS would grow to $10 50 and at a PE of & the stock would be valued at 504.00 Oto-because FPS wound grow to $600 and PE of the lock would be valued at $40.00 Os tece EPS od grow to $50 and at a Pt of the stock would be valued at $700 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 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 6.25 B 7.5 $ 50.00 $ 60.00 Net Income P/E Target Company 2022 (F) 30,000,000 Net Income Shares Outstanding EPS PE Price Consolidated (a) (b) (c) # Big Time will puchase the target company at a P/E of 5 times the Target Company's 2022 (F) forecasted net income Big Time will finance the deal in an at stock acqusition using its stock valued at a PE of 8 (Stock Price @ year end 2021 is $50.00 It Big Time does not make the acquistion, it is forcasted to eam EPS of 57 50 and trade at a P/E of 8, which would equate to $60.00 per share Should Big Time make the acquision to enhance shareholder value? If you calculate the yellow cells (a), (b), (c), (d) correctly yoy will get the correct answer O Yes because EPS would grow to $10.50 and at a PE of B the stock would be valued at 504.00 No beonne EPS would grow to $6.00 and at a PE of t the stock would be valued at $41.00 O Yes became EPS wadd grow to 50 50 and at a PE of 0 the stock would be valued at $76.00)