The Blue Oil Corporation and the Grey Plastics Company have agreed to a merger. The Grey Plastics
Question:
a. Complete the following table:
b. Calculate the premium percentage received by the Grey stockholders. Assume both that immediate synergistic earnings of $3 million per year will occur as a result of the merger and that the P/E ratio of the combined companies is 10.5.
c. Rework part a.
d. Rework partb.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Transcribed Image Text:
Grey Combined Blue Oil Plastics Companies $500 $ 60 Sales (millions) Earnings after taxes (millions) Common shares outstanding (millions) Earnings per share Common stock (price per share) Price-earnings ratio $125 $13 16 $3.75 3.25 $41.25 $26 10.0
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a Combined companies Sales 625 million Net Income 73 million Combined companies common shares For ea...View the full answer
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Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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