2. An excerpt from the financial data of firms A and B is given below. Both firms have agreed to merge with firm B taking over firm A. The exchange ratio for the merger will be 1:3, meaning that the stockholders of A will receive 1 share of firm B in lieu of every 3 shares they currently hold in firm A.
Item Firm A Firm B
P/E Ratio US8.192 US16
Shares Outstanding 96,000 200,000
Earnings US250,000 US800,000
EPS US$2.6042 US4.00
It is estimated that the NPV from the acquisition will be zero, meaning that the benefits and costs of the merger will be equal.
Using the presented information, comment on whether the merger will lead to a growth in earnings for the combined firm.
Why work with us?
Authenticity:
All of our papers are authentic, as each paper of ours is composed according to your unique requirements.
Confidentiality:
We value you data. Our company is extremely efficient in guarding the privacy of our clients.
100% Money Back Guarantee:
In the event you cancel your order, you get your money back as soon as possible, we give a 100% refund.
24/7 Support:
Our team members are available via email, live chat, and phone.
Revision Policy:
You can apply for a revision if you think your paper could be better. In this case, your paper will be revised either by the specialist assigned to you or by another writer.
How the Platform Works
- Click on 'Place Your Order' tab on the menu or click on 'Order Now' tab at the bottom and a new order page will appear
- Fill in your requirements depending on your needs under the 'PAPER DETAILS' area
- In the next section, fill in the academic level, required number of pages, paper deadline as provided in the drop-down menus.
- To enter your registration details, click on 'CREATE ACCOUNT & SIGN IN'. This step allows you to create an account with us for purposes of record-keeping. Click on 'PROCEED TO CHECK OUT' at the bottom of the page
- The next section requires you to fill in the payment details. Follow the guided process and soon your order will be available for our team to work on.
