Transcribed Image Text
The shareholders of Flannery Company have voted in favor of abuyout offer from Stultz Corporation. Information about each firmis given here:FlanneryStultzPrice–earnings ratio12.835Shares outstanding96,000350,000Earnings$210,000$840,000Flannery’s shareholders will receive one share of Stultz stock forevery three shares they hold in Flannery.a-1. What will the EPS of Stultz be after themerger? (Do not round intermediate calculations and roundyour answer to 3 decimal places, e.g., 32.161.)EPS $a-2. What will the PE ratio be if the NPV of theacquisition is zero? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)PE b. What must Stultz feel is the value of thesynergy between these two firms? (Do not leave the cellblank. Enter "0" if there is no value. Do not round intermediatecalculations.)Synergy value $