Question: answer this question part a b and c Question 4 Global Dot Com Enterprise is determined to report earnings per share of $2.67, Therefore they
answer this question part a b and c
Question 4 Global Dot Com Enterprise is determined to report earnings per share of $2.67, Therefore they decide to acquire Wheel and Rim Company. The following are data extracted from financial statement of both companies. Wheel and Rim Merger Firms Earnings per share Price per share Price-earnings ratio Number of shares Total earnings Total market value Global Dot Com Enterprise $2.40 $40 20 100,000 $200,000 $4,000,000 $2.50 $25 10 200,000 $500,000 $5,000,000 $2.67 0 (ii) (iii) (iv) (v) There are no gains from merging. In exchange for Wheel and Rim shares, Global Dot Com Enterprise issue just enough of its own shares to ensure its $2.67 earnings per share (a) Complete the data from (i) till (v) for the merged firms. (5 marks) (b) How many percentages of shares of Global Dot Com Enterprises are exchanged for each share of Wheel and Rim? (2 marks) (c) Determine the cost of merger to World Enterprises
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