Your company has earnings per share of $$4\mathrm{.}50.$ It has $1\mathrm{.}3$ million shares outstanding, each of which has a price of $$40\mathrm{.}10.$ You are

thinking of buying TargetCo, which has earnings per share of $$2\mathrm{.}25,1\mathrm{.}4$ million shares, and a price per share of $$26\mathrm{.}50.$ You will pay

for TargetCo by issuing new shares. There are no expected synergies from the transaction.

a$.$ If you pay no premium to buy TargetCo, what will be your earnings per share after the merger?

b$.$ 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 TargetCo. What will be your earnings per share after the merger?

c$.$ What explains the change in earnings per share in part $($a$)?$ Are your shareholders any better or worse off?

d$.$ What will be your price$-$earnings ratio after the merger $($if you pay no premium$)?$ How does this compare to your P$/$E ratio before

the merger? How does this compare to TargetCo's premerger P$/$E ratio?

a$.$ If you pay no premium to buy TargetCo, what will be your earnings per share after the merger?

EPS after the merger is $

$($Round to the nearest cent.$)$