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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 9.6 20
Shares outstanding 72,000 230,000
Earnings $ 200,000 $ 920,000

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 final 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 final answer to 2 decimal places. (e.g., 32.16))

PE

b.

What must Stultz feel is the value of the synergy between these two firms? (Do not round intermediate calculations.)

Synergy value $

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