The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation. Information about each firm is given here: Bread Butter Price-earnings ratio 16 23 Shares outstanding 96,000 230,000 Earnings $ 180,000 $ 900,000 Bread's shareholders will receive one share of Butter stock for every three shares they hold in Bread. a-1. What will the EPS of Butter be after the merger?(Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a-2. What will the PE ratio be if the NPV of the acquisition is zero?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What must Butter feel is the value of the synergy between these two firms? a-1. EPS a-2. PE b. Synergy value

The shareholders of Bread Company have voted in favor of a buyout offer from Butter Corporation. Information about each firm is given here: Bread Butter Price-earnings ratio 16 23 Shares outstanding...

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

Bread's shareholders will receive one share of Butter stock for every three shares they hold in Bread.

a-1.	What will the EPS of Butter be after the merger?(Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
a-2.	What will the PE ratio be if the NPV of the acquisition is zero?(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	What must Butter feel is the value of the synergy between these two firms?

Jun 09, 2022