Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of $250,000, has 100,000 shares of common stock outstanding, and expects earnings to grow at an annual rate of 9%. RCN had 2019 earnings of $900,000, has 200,000 shares of common stock outstanding, and expects its earnings to grow at 3% per year. a. Calculate the expected earnings per share (EPS) for Graham & Sons for each of the next 5 years (2020-2024) without the merger. part A answers are completed year 2020: $2.725 year 2021: $2.97425 year 2022: $3.24239 year 2023: $3.53487 year 2024: $3.85425 b. What would Graham's stockholders earn in each of the next 5 years (2020-2024) on each of their Graham shares swapped for RCN shares at a ratio of 0.8 share of RCN for 1 share of Graham? Part B is where I need help. year 2020 EPS: $3.43 year 2021 EPS: $ ? year 2022 EPS: $ ? year 2023 EPS: $ ? year 2023 ESP: $ ? please help me find calculation for year 2021 to year 2024 in part B
Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of $250,000, has 100,000 shares of common stock outstanding, and expects earnings to grow at an annual rate of 9%. RCN had 2019 earnings of $900,000, has 200,000 shares of common stock outstanding, and expects its earnings to grow at 3% per year. a. Calculate the expected earnings per share (EPS) for Graham & Sons for each of the next 5 years (2020-2024) without the merger. part A answers are completed year 2020: $2.725 year 2021: $2.97425 year 2022: $3.24239 year 2023: $3.53487 year 2024: $3.85425 b. What would Graham's stockholders earn in each of the next 5 years (2020-2024) on each of their Graham shares swapped for RCN shares at a ratio of 0.8 share of RCN for 1 share of Graham? Part B is where I need help. year 2020 EPS: $3.43 year 2021 EPS: $ ? year 2022 EPS: $ ? year 2023 EPS: $ ? year 2023 ESP: $ ? please help me find calculation for year 2021 to year 2024 in part B
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 7P
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Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of $250,000, has 100,000 shares of common stock outstanding, and expects earnings to grow at an annual rate of 9%. RCN had 2019 earnings of $900,000, has 200,000 shares of common stock outstanding, and expects its earnings to grow at 3% per year.
a. Calculate the expected earnings per share (EPS) for Graham & Sons for each of the next 5 years (2020-2024) without the merger.
part A answers are completed
year 2020: $2.725
year 2021: $2.97425
year 2022: $3.24239
year 2023: $3.53487
year 2024: $3.85425
b. What would Graham's stockholders earn in each of the next 5 years (2020-2024) on each of their Graham shares swapped for RCN shares at a ratio of 0.8 share of RCN for 1 share of Graham?
Part B is where I need help.
year 2020 EPS: $3.43
year 2021 EPS: $ ?
year 2022 EPS: $ ?
year 2023 EPS: $ ?
year 2022 EPS: $ ?
year 2023 EPS: $ ?
year 2023 ESP: $ ?
please help me find calculation for year 2021 to year 2024 in part B
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b. The expected post-merger EPS in year 2020 for Graham's stockholders on each of their original shares of stock which was swapped for RCN stock is
$3.43 (Round to the nearest cent.)
The expected post-merger EPS in year 2021 for Graham's stockholders on each of their original shares of stock which was swapped for RCN stock is $3.58 (Round to the nearest cent.)
The expected post-merger EPS in year 2022 for Graham's stockholders on each of their original shares of stock which was swapped for RCN stock is $3.73 (Round to the nearest cent.)
The expected post-merger EPS in year 2023 for Graham's stockholders on each of their original shares of stock which was swapped for RCN stock is $3.90 (Round to the nearest cent.)
The expected post-merger EPS in year 2024 for Graham's stockholders on each of their original shares of stock which was swapped for RCN stock is $4.07.(Round to the nearest cent.)
(Please double check. These are the answers (in bold print) that I got.)
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