P18-11 (similar to) EPS and postmerger price Data for Henry Company and Mayer Services are...
90.2K
Verified Solution
Link Copied!
Question
Finance
P18-11 (similar to) EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table, Henry Company is considering merging with Mayer by swapping 1.34 shares of its stock for each share of Mayer stock. Henry Company expects its stock to sell at the same pricelearnings (P/E) multiple after the merger as before merging a. Calculate the ratio of exchange in market price. b. Calculate the earnings per share (EPS) and pricelearnings (P/E) ratio for each company c. Calculate the pricelearnings (P/E) ratio used to purchase Mayer Services. d. Calculate the post-merger earnings per share (EPS) for Henry Company e. Calculate the expected market price per share of the merged firm. a. The ratio of exchange in market price is (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Item Earnings available for common stock Number of shares of common stock outstanding Market price per share Henry Company Mayer Services . $215,000 $100,000 120,000 20,000 $25 $90 Print Done
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
