Eps-pe and mergers, The shareholders of Flannery Company

Eps-pe and mergers

Reference no: EM1343787

The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here:

Flannery Stultz
Price-earnings ratio 5.60 16.80
Shares outstanding 59,000 177,000
Earnings $225,000 $900,000

Flannery's shareholders will receive one share of Stultz stock for every four shares they hold in Flannery.

Question 1:

(a) What will the EPS of Stultz be after the merger? Round your answer to 2 decimal places. (e.g., 32.16)
EPS: $__________

(b) What will the PE ratio be if the NPV of the acquisition is zero?(Round your answer to 2 decimal places. (e.g., 32.16)
PE ratio: ______

Question 2:

What is the value of Flannery to Stulz?

Value of Flannery to Stulz: $___________

Reference no: EM1343787

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