Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The shareholders of Tilbury Company have voted in favour of a buyout offer from Dover Corporation. Information about each firm is given here: Price/earnings ratio

image text in transcribed

The shareholders of Tilbury Company have voted in favour of a buyout offer from Dover Corporation. Information about each firm is given here: Price/earnings ratio Shares outstanding Earnings Tilbury 9.50 84,000 $ 280,000 Dover 31 310,000 $950,000 Tilbury's shareholders will receive one share of Dover stock for every three shares they hold in Tilbury. (Do not leave any empty spaces; input a O wherever it is required.) a-1. What will the EPS of Dover be after the merger? (Round the final answer to 3 decimal places. Omit $ sign in your response.) EPS $ a-2. What will the P/E ratio be if the NPV of the acquisition is zero? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) PE times b. What must Dover feel is the value of the synergy between these two firms? (Omit $ sign in your response.) Synergy value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance And Financial Markets

Authors: Keith Pilbeam

2nd Edition

1403948356, 978-1403948359

More Books

Students also viewed these Finance questions