How many shares must shim issue in the acquisition

Assignment Help Finance Basics
Reference no: EM13573934

Earnings per Share. Shim Company wishes to acquire Siegel Company by exchanging 0.8 share of its stock for each share of Siegel. Financial data follow:


Shim

Siegel

Net income

$200,000

$40,000

Shares outstanding

50,000

20,000

Earnings per share

$4

$2

Market price

$40

$16

P/E ratio

10

8

Shim issues its shares to make the acquisition.

(a) How many shares must Shim issue in the acquisition?

(b) Assuming the net income of each firm remains the same, what is the earnings per share after the acquisition?

(c) What is the amount earned per share on the original shares of Siegel stock?

(d ) What is the amount earned per share on the original shares of Shim stock?

Reference no: EM13573934

Questions Cloud

Suppose that the plant can be sold for 90 million to : an auto plant that costs 100 million to build can produce a new line of cars that will generate cash flows with a
Jhns post merger beta is estimated to be 15 the : merger value. burger queen a national hamburger chain is considering a smaller chain johns burger. burger queens
The dunphys made timely estimated federal income tax : requiredbull use the following information to complete phillip and claire dunphys 2012 federal income tax return. if
The purpose of this assignment is for you to apply your : the purpose of this assignment is for you to apply your understanding of sociological theory and concepts to the world
How many shares must shim issue in the acquisition : earnings per share. shim company wishes to acquire siegel company by exchanging 0.8 share of its stock for each share
Troy engines ltd manufactures a variety of engines for use : troy engines ltd. manufactures a variety of engines for use in heavy equipment. the company has always produced all of
Palmiero purchased a patent from vania co for 1127800 on : answer the questions asked about each of the factual situations. if answer is zero please enter 0. do not leave any
1 what is the purpose of international relations theory - : 1. what is the purpose of international relations theory? - short answer 300 words2. what is the purpose of the state?
Wat is the earnings per share of the merged company based : earnings per share of merged company. paula company wants to acquire david company. relevant data followpauladavidnet

Reviews

Write a Review

Finance Basics Questions & Answers

  Discuss the general characteristics of each

Identify the alternatives for investing cash on a short-term basis, and discuss the general characteristics of each.

  What is the operating profit if the sales was 2860000 and

what is the operating profit if the sales was 2860000 and costs of goods sold 2450000 depreciation was 6 of the total

  What is the net cost of the spectrometer

The spectrometer would have no effect on revenues, but it is expected to save the firm $25,000 per year in before-tax operating costs, mainly labor. The firm's marginal federal-plus-state tax rate is 40%.

  Since the fed has no direct influence over the bond market

since the fed has no direct influence over the bond market explain why indirectly monetary policy can move the long

  Abc inc borrows 100m jpy when jpy spot rate is jpy120 the

abc inc. borrows 100m jpy when jpy spot rate is jpy120. the jpy interest rate for the loan is 3. one year later when

  What is the amount you will receive each year

The fine print in the ad says that for a $1000 deposit, the bank will pay $100 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the IRR of this investment)?

  An internet company earned 650 per share and paid

inferring financial information using a ratio - an internet company earned 6.50 per share and paid dividends of 3.50

  What is jensens cost of preferred stock

Jensen's Travel Agency has 9 percent preferred stock outstanding that is currently selling for $30 a share. The market rate of return is 10 percent and the firm's tax rate is 34 percent. What is Jensen's cost of preferred stock?

  Calculating the value of securities

Assume that you inherited some money. A friend of yours is working as unpaid intern at local brokerage firm, and her boss is selling securities that call for 4 payments-You should compute the value of securities to decide whether they are the good i..

  What is the corporation''s tax basis in the property

Rachelle transfers property with a tax basis of $800 and a fair market value of $900 to a corporation in exchange for stock with a fair market value of $750 and $50 in a transaction that qualifies for deferral under section 351. the coporation assume..

  What will be the firm quick ratio

How much can a company's short-term debt(notes payable) increase without pushing its current ratio below 2.0? What will be the firm's quick ratio after Nelson has raise the maximum amount of short-term funds?

  What do you think about the increasing use of restrictive

select any three questions from the list below and post your response in the discussion forum.should employers offer

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd