Question
The shareholders of Tilbury Company have voted in favour of a buyout offer from Dover Corporation. Information about each firm is given here: Tilbury Dover
The shareholders of Tilbury Company have voted in favour of a buyout offer from Dover Corporation. Information about each firm is given here:
| Tilbury | Dover | |||||
| Price/earnings ratio | 13.20 | 22 | ||||
| Shares outstanding | 99,000 | 250,000 | ||||
| Earnings | $ | 220,000 | $ | 1,000,000 | ||
Tilbury's shareholders will receive one share of Dover stock for every three shares they hold in Tilbury.
a. What will the EPS of Dover be after the merger?
b. What will the P/E ratio be if the NPV of the acquisition is zero?
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Your Financial Future How To Take Control Of Your Financial Future
Authors: Deloris Lutke
1st Edition
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