x
Info
x
Warning
x
Danger
 / 
 / 
 / 
6.Impact of merger earnings per share (LO20-3) Assume the following

Question : 6.Impact of merger earnings per share (LO20-3) Assume the following : 1553931

6.Impact of merger on earnings per share (LO20-3) Assume the following financial data for the Noble Corporation and Barnes Enterprises:

NobleBarnes

Corporation

Enterprises

Total earnings.........................

$1,820,000

$5,620,000

Number of shares of stock outstanding.........

650,000

2,810,000

Earnings per share......................

$2.80

$2.00

Price-earnings ratio (P/E).................

20×

28×

Market price per share................     $56     $56

a.If all the shares of the Noble Corporation are exchanged for those of Barnes Enterprises on a share-for-share basis, what will postmerger earnings per share be for Barnes Enterprises? Use an approach similar to that in Table 20–3.

b.Explain why the earnings per share of Barnes Enterprises changed.

c.Can we necessarily assume that Barnes Enterprises is better off after the merger?

Solution
5 (1 Ratings )

Solved
Finance 1 Year Ago 62 Views
This Question has Been Answered!

Related Answers
Unlimited Access Free
Explore More than 2 Million+
  • Textbook Solutions
  • Flashcards
  • Homework Answers
  • Documents
Signup for Instant Access!
Ask an Expert
Our Experts can answer your tough homework and study questions
275782 Finance Questions Answered!
Post a Question