Ebony Corporation has negotiated the acquisition of Ivory Company in an exchange of shares. Under the terms of the merger, the exchange ratio will be 2.30. Other important pre-merger information for both companies is given below: Expected sales Shares outstanding Expected EPS without merger P/E ratio Ebony Corporation P65,000,000 2,500,000 Ivory Company P10,000,000 250,000 P2.00 P1.56 8 12 11. Assuming no synergy, the estimated post-merger earnings per share for Ebony Corporation is nearest P1.76. a. b. P1.78. PI.56. P1.43. с. d. Based on the information given above, the percentage acquisition premium is nearest 22.6%. 12. a. b. 19.6%. c. 79.4%. d. 52.0%.

Ebony Corporation has negotiated the acquisition of Ivory Company in an exchange of shares. Under the terms of the merger, the exchange ratio will be 2.30. Other important pre-merger information for both companies is given below: Expected sales Shares outstanding Expected EPS without merger P/E ratio Ebony Corporation P65,000,000 2,500,000 Ivory Company P10,000,000 250,000 P2.00 P1.56 8 12 11. Assuming no synergy, the estimated post-merger earnings per share for Ebony Corporation is nearest P1.76. a. b. P1.78. PI.56. P1.43. с. d. Based on the information given above, the percentage acquisition premium is nearest 22.6%. 12. a. b. 19.6%. c. 79.4%. d. 52.0%.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 7P

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