Solve

Exercise 8 (MA Valuation /3 marks) You are trying to value synergy in a merger and have been provided with information on both the acquiring and target firms. Company A Company B (Acquirer) Target) Total earnings 12,000,000 3,576,000 Shares outstanding 60,000 12,000 Price per Share 300 90 Assuming that company A is acquiring company B by exchanging 6,000 of its new shares for all the shares in B. 25. If the merged company is worth # 23,760,000, the cost of the merger is equal to (in #s): a. 3,600,000 b. 2,376,000 c. 2,160,000 d. 2,400,000 26. The EPS of the combined Company post-merger is equal to (in #): a. 250 b. 236 c. 290 d. 272 7