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PLEASE ANSWER ASAP Your company has earnings per share of 4. It has 1 million shares outstanding, each with a price of 40. You are

PLEASE ANSWER ASAP image text in transcribed
Your company has earnings per share of 4. It has 1 million shares outstanding, each with a price of 40. You are thinking of buying Boost Co, which has earnings per share of 2, 1 million shares outstanding, and a price per share of 25. You will pay for Boost Co by issuing new shares. The synergy as a result of this acquisition will increase your original company's EPS and share price by 25%. REQUIRED: (a) If you do not pay any premium to buy Boost Co, what will your earnings per share be after the acquisition? (8 marks) (b) Assuming instead that you pay a 20% premium to buy Boost Co: i. What will your earnings per share be after the acquisition? (3 marks) ii. Are you better off with this acquisition? Explain. (3 marks) (c) What is the maximum percentage premium you are willing to pay before Boost Co becomes too expensive acquire? (6 marks)

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