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You are given the following data on a merger AlphaAir has proposed to acquire TargetAir at a price of 20 per share for TargetAirs's stock.
You are given the following data on a merger
AlphaAir has proposed to acquire TargetAir at a price of 20 per share for TargetAirs's stock. Calculate the post-merger P/E ratio, assuming that cash is used in the acquisition and the merger has no immediate effect on total firm income.
AlphaAir TargetAir Merged Firm 100 10 Price per share Total earnings Shares outstanding 500 300 100 40 Total Value 10,000 400 11,000Step by Step Solution
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