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Your company has eamings per share of $5, It has 1 milion shares outstanding. each of wich has a price of $41. You are thinking

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Your company has eamings per share of \$5, It has 1 milion shares outstanding. each of wich has a price of \$41. You are thinking of bujing TargetCo, which has eacnings per share of \$1, 1 million shares outstanding. and a price per share of \$22. You will pay for TargotCo by lasuing new shares. There are no expected synergies fram the transaction. Suppose you offer an exchange ratio such. that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy fargetCo. Assume that on the announcement the larget price will go up and your price wil go down to reflect the fact that you are willing to pay a promium for TargetCo. Assume that the takoover will occur with cortainty and all market particpants know this on the announcement of the takeover a. What is the price per share of the combined corporation immed stoly atior the merger is completed? b. What is the price of your company immediatoly atter the announcement? c. What is the price of TargetCo immediately after the announcement? d. What is the actual premium your company will pay? a. What is the price per share of the combined corporason immediately after the merger is completed? The share price will bes (Round to the nearest cent)

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