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 Price-earnings 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.) 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.) b. What must Stultz feel is the value of the synergy between these two firms?
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