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tia_tia [17]
3 years ago
15

Your company has earnings per share of $ 4.19. It has 1.9 million shares​ outstanding, each of which has a price of $59. You are

thinking of buying​ TargetCo, which has earnings per share of $ 2.10, 1.9 million shares​ outstanding, and a price per share of $ 21.You will pay for TargetCo by issuing new shares. There are no expected synergies from the transaction. If companies in the same industry as TargetCo are trading at multiples of 12 times​earnings, what would be one estimate of an appropriate premium for​TargetCo?
TargetCo has $2.10 in​ earnings, so if other companies in its industry are trading at 12 times​ earnings, then a starting point for a valuation of TargetCo in this transaction might be ________ per​share, implying a _________ premium
Business
1 answer:
sveticcg [70]3 years ago
8 0

Answer:

If the current earnings per share of TargetCo. are $2.10, and the times earnings multiple is 12, the relative valuation should result in a $2.10 x 12 = $25.20 per stock. This means that the premium per stock = $25.20 - $21 = $4.20, and the total premium paid for all the 1.9 million shares = $7.98 million.

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romanna [79]
Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions.
Your question should be complete with details. I managed to check from other sources the details and the complete question:

below is the solution:

<span>$175,000 - $110,000 DL = $65,000</span>
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3 years ago
Last year, Candle Corp had $200,000 of assets, $300,000 of sales, $20,000 of net income, and a debt-to-total-assets ratio of 40%
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Answer: 342,000

Explanation:

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3 years ago
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the answer would be tarragon just like the french tarragon that has an anise flavor sth licoricshiy.  

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Medicare deduction is withheld at a standard rate of 1.45 percent. suppose your gross pay this week is $750. how much medicare t
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3 years ago
Cutter Enterprises purchased equipment for $72,000 on January 1, 2018. The equipment is expected to have a five-year life and a
hram777 [196]

Answer:

$28,800

$25920

Explanation:

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