Question
The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here: Flannery Stultz
The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here: Flannery Stultz Priceearnings ratio 11.2 38 Shares outstanding 84,000 380,000 Earnings $ 240,000 $ 960,000 Flannerys shareholders will receive one share of Stultz stock for every three shares they hold in Flannery. a-1. What will the EPS of Stultz be after the merger? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) EPS $ a-2. What will the PE ratio be if the NPV of the acquisition is zero? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) PE ratio b. What must Stultz feel is the value of the synergy between these two firms? (Do not round intermediate calculations.) Synergy value $
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started