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The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation. Information about each firm is given here: table
The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation. Information about each firm is given here:
tabletablePriceearningsratioBread,ButtertableSharesoutstandingEarnings
Bread's shareholders will receive one share of Butter stock for every three shares they hold in Bread.
a What will the EPS of Butter be after the merger? Do not round intermediate calculations and round your answer to decimal places, eg
a What will the PE ratio be if the NPV of the acquisition is zero? Do not round intermediate calculations and round your answer to decimal places, eg
b What must Butter feel is the value of the synergy between these two firms?
tablea EPS,a PEb Synergy value,
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