Problem 21-4 The Bootstrap Game (L01) World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim and Axle Company. There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.67 earnings per share objective. a. Complete the table below for the merged firm. b. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? c. What is the cost of the merger to World Enterprises? d. What is the change in the total value of the World Enterprises shares that were outstanding before the merger? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Complete the table below for the merged firm. (Do not round intermediate calculations. Round "Price per share" and "Price- earnings ratio" to 2 decimal places and other answers to the nearest whole number.) Merged Firm World Enterprises $ 2.00 Wheelrim and Axle $ 2.50 $ 2.67 $ 40 $ 25$ 34.33 20 10 12.90 Earnings per share Price per share Price-earnings ratio Number of shares Total earnings Total market value 262,172 $ 100,000 200,000 4,000,000 $ 200,000 500,000 $ 5,000,000 $ 700,000 9,000,000 $ $ Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? (Do not round intermediate calculations and enter your answers rounded to 2 decimal places.) Shares exchanged for each share 162,172.00 Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What is the cost of the merger to World Enterprises? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.) Merger cost 567,365 World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim and Axle Company. There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.67 earnings per share objective. a. Complete the table below for the merged firm. b. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? c. What is the cost of the merger to World Enterprises? d. What is the change in the total value of the World Enterprises shares that were outstanding before the merger? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D What is the change in the total value of the World Enterprises shares that were outstanding before the merger? (Do not round intermediate calculations. Round your answer to the nearest whole dollar. Enter your answer as a positive value.) The market value of the original World shareholders' shares decreased by $ 567,365
