Find what will earnings per share be after the merger

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Your company has earnings per share of $8. It has 1 million shares outstanding, each of which has a price of $60. You are thinking of buying TargetCo, which has earnings per share of $4, 1 million shares outstanding, and a price per share of $37.50. You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction.

Problem a. If you pay no premium to buy TargetCo, what will your earnings per share be after the merger?

Reference no: EM132755979

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