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Calculate the premium percentage received by the grey

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Reference no: EM131122475

The Blue Oil Corporation and the Grey Plastics Company have agreed to a merger. The Grey Plastics stockholders will receive 0.75 shares of Blue for each share of Grey held. Assume that no synergistic benefits are expected.

a. Complete the following table:

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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.

Reference no: EM131122475

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