Assume the following financial data for the Noble Corporation and Barnes Enterprises: a. If all the shares
Question:
Assume the following financial data for the Noble Corporation and Barnes Enterprises:
a. If all the shares of the Noble Corporation are exchanged for those of Barnes Enterprises on a share-for-share basis, what will postmerger earnings per share be for Barnes Enterprises?
b. Explain why the earnings per share of Barnes Enterprises changed.
c. Can we necessarily assume that Barnes Enterprises is better off after themerger?
Transcribed Image Text:
Noble Barnes Total earnings Number of shares of stock outstanding Eamings per share. Price-earmings ratio (P/E) Market price per share Corporation Enterprises $1,820,000 $5,620,000 650,000 2,810,000 $2.00 28x S56 S2.80 20x S56
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a b Earnings per share of Barnes Enterprises increased because it has a higher PE ratio than Noble C...View the full answer
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Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
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