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The Jeter Corporation is considering acquiring the A - Rod Corporation. The data for the two companies are as follows: A - Rod Corp. Jeter
The Jeter Corporation is considering acquiring the ARod Corporation. The data for the two companies are as follows:
ARod Corp. Jeter Corp.
Total earnings $ $
Number of shares of stock outstanding
Earnings per share $ $
Priceearnings ratio PE
Market price per share $ $
a The Jeter Corp. is going to give ARod Corp. a percent premium over ARods current market value. What price will it pay? Do not round intermediate calculations and round your answer to the nearest whole number.
b At the price computed in part a what is the total market value of ARod Corp.? Use the number of ARod Corp. shares times price.Do not round intermediate calculations and round your answer to the nearest whole number.
c At the price computed in part a what is the PE ratio Jeter Corp. is assigning ARod Corp? Do not round intermediate calculations and round your answer to decimal places.
d How many shares must Jeter Corp. issue to buy the ARod Corp. at the total value computed in part bDo not round intermediate calculations and round your answer to the nearest whole number.
e Given the answer to part d how many shares will Jeter Corp. have after the merger? Do not round intermediate calculations and round your answer to the nearest whole number.
f What are the new postmerger earnings per share? Do not round intermediate calculations and round your answer to decimal places.
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