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Your company has earnings per share of $ 4 . 1 8 . It has 1 . 8 7 9 million shares outstanding , each

Your company has earnings per share of $4.18. It has 1.879 million sharesoutstanding, each of which has a price of $50.00. You are thinking of buying TargetCo, which has earnings per share of $2.09,1.857 million sharesoutstanding, and a price per share of $23.00. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. If companies in the same industry as TargetCo are trading at multiples of 15 timesearnings, what would be one estimate of an appropriate premium for TargetCo?

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