Question
ABC Corporation is projected to earn $206.8 million next year, 14.0 million shares outstnding. The firm is planning to buy DEF Corp for 200
ABC Corporation is projected to earn $206.8 million next year, 14.0 million shares outstnding. The firm is planning to buy DEF Corp for 200 million in cash. ABC will borrow this 200 million at an annual interest rate of 5% and the corporate tax rate is 30%. DEF is projected to earn 15.9 million next year. What is the post-merger EPS of ABC?
Step by Step Solution
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Step: 1
To calculate the postmerger EPS Earnings Per Share of ABC Corporation after acquiring DEF Corp we ne...
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Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
