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Willow Enterprises is considering the acquisition of Steadfast Corp. in a stock swap transaction. Currently, Willow's stock is selling for $48 per share. Although Steadfast's
Willow Enterprises is considering the acquisition of Steadfast Corp. in a stock swap transaction. Currently, Willow's stock is selling for $48 per share. Although Steadfast's shares are currently trading at $30 per share, the firm's asking price is $60 per share. a. If Willow accepts Steadfast's terms, what is the ratio of exchange? b. If Steadfast has 18,000 shares outstanding, how many new shares must Willow issue to consummate the transaction? c. If Willow has 130,000 shares outstanding before the acquisition, and earnings for the merged company are estimated to be $400,000, what is the EPS for the merged company? a. If Willow accepts Steadfast's terms, the ratio of exchange is I. (Round to six decimal places.) b. If Steadfast has 18,000 shares outstanding, howthe number of new shares Willow must issue to consummate the transaction is shares. (Round to the nearest whole number.) c. The EPS for the merged company is $. (Round to the nearest cent.)
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