Bidder plans to buy the target with 50,000 of its own shares. Offer price includes no...

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Bidder plans to buy the target with 50,000 of its own shares. Offer price includes no premium over the market price. If you were a shareholder of the bidder would you approve this deal? Price # of shares Bidder Target Merged 40.00 20.00 40,00 100,000 100,000 150,000 Market Value 4,000,000 2,000,000 6,000,000 PE Ratio 20x 10x Earnings 200,000 200,000 EPS 2.00 2.00 15x 400,000 2.67 Bidder plans to buy the target with 50,000 of its own shares. Offer price includes no premium over the market price. If you were a shareholder of the bidder would you approve this deal? Price # of shares Bidder Target Merged 40.00 20.00 40,00 100,000 100,000 150,000 Market Value 4,000,000 2,000,000 6,000,000 PE Ratio 20x 10x Earnings 200,000 200,000 EPS 2.00 2.00 15x 400,000 2.67

Answer rating: 100% (QA)

As a shareholder of the bidder I would not approve this deal for the following reasons 1 No Premium ... View the full answer