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The shareholders of Fantastic Frames Inc. (FFI) have voted in favour of a buyout offer from the Heavenly Home Dcor (HHD). FFI's shareholders will receive one share of HHD stock for every two shares they hold in FFI. Information about each firm is given here: Share Price Shares Outstanding Earnings FFI $32 150,000 500,000 HHD $80 480,000 1,200,000 40. What will be the price per share of the combined firm assuming the market is fooled by the growth in EPS? (Hint: Assume P/E ratio of HHD stays constant) A) $64 B) $80 C) $87.77 D) $97.92 E) None of the above. 41. What will be the new P/E ratio of the combined firm if the NPV of the acquisition is zero and the market knows it? A) 26.14 B) 32 C) 35.98 D) 37.14 E) None of the above. The shareholders of Fantastic Frames Inc. (FFI) have voted in favour of a buyout offer from the Heavenly Home Dcor (HHD). FFI's shareholders will receive one share of HHD stock for every two shares they hold in FFI. Information about each firm is given here: Share Price Shares Outstanding Earnings FFI $32 150,000 500,000 HHD $80 480,000 1,200,000 40. What will be the price per share of the combined firm assuming the market is fooled by the growth in EPS? (Hint: Assume P/E ratio of HHD stays constant) A) $64 B) $80 C) $87.77 D) $97.92 E) None of the above. 41. What will be the new P/E ratio of the combined firm if the NPV of the acquisition is zero and the market knows it? A) 26.14 B) 32 C) 35.98 D) 37.14 E) None of the above