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TNT Corporation is considering the acquisition of BRM Corporation. TNT has 22 0,000 shares of stock, with earnings per share of $2 .50 and a
TNT Corporation is considering the acquisition of BRM Corporation. TNT has 220,000 shares of stock, with earnings per share of $2.50 and a market price per share of $30. BRM has 265,000 shares outstanding with earnings per share of $1.40 and a market price of $10. The merger is expected to increase net income of the combined companies by $257,000 (in synergistic benefits). What is the maximum exchange ratio TNT can offer and what is the minimum exchange ratio BRM could accept?
TNT Corporation is considering the acquisition of BRM Corporation. TNT has 220,000 shares of stock, with earnings per share of $2.50 and a market price per share of $30. BRM has 265,000 shares outstanding with earnings per share of $1.40 and a market price of $10. The merger is expected to increase net income of the combined companies by $257,000 (in synergistic benefits). What is the maximum exchange ratio TNT can offer and what is the minimum exchange ratio BRM could accept?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
