Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of $300,000, has 100,000 shares of common stock outstanding, and expects earnings to grow at an annual rate of 7%. RCN had 2019 earnings of $900,000, has 200,000 shares of common stock outstanding, and expects its earnings to grow at 5% 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. 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? a. The expected EPS for Graham & Sons for year 2020 without the merger is $ ? (Round to the nearest cent.)
Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of $300,000, has 100,000 shares of common stock outstanding, and expects earnings to grow at an annual rate of 7%. RCN had 2019 earnings of $900,000, has 200,000 shares of common stock outstanding, and expects its earnings to grow at 5% 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. 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? a. The expected EPS for Graham & Sons for year 2020 without the merger is $ ? (Round to the nearest cent.)
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 4P
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Graham & Sons wishes to evaluate a proposed merger into the RCN Group. Graham had 2019 earnings of $300,000, has 100,000 shares of common stock outstanding, and expects earnings to grow at an annual rate of 7%. RCN had 2019 earnings of $900,000, has 200,000 shares of common stock outstanding, and expects its earnings to grow at 5% 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.
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?
a. The expected EPS for Graham & Sons for year 2020 without the merger is
$ ? (Round to the nearest cent.)
The expected EPS for Graham & Sons for year 2021 without the merger is
$ ? (Round to the nearest cent.)
The expected EPS for Graham & Sons for year 2022 without the merger is
$ ? (Round to the nearest cent.)
The expected EPS for Graham & Sons for year 2023 without the merger is
$ ? (Round to the nearest cent.)
The expected EPS for Graham & Sons for year 2024 without the merger is
$ ? (Round to the nearest cent.)
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
$ ? (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
$ ? (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
$ ? (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
$ ? (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
$ ? (Round to the nearest cent.)
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