Question

The shareholders of Flannery Company have voted in favor of a buyout offer from Stultz Corporation. Information about each firm is given here:

Answer 1

Answer:

The answer is "$4.311".

Explanation:

Calculating the EPS after the merger:

$\text{Stultz Corp Post Merger Earnings} = 220,000 + 1,000,000$

                                                      $= \ 1,220,000$

$\to \text{Number of Shares Post Merger:} \\\\=\frac{99,000}{3} + 250,000\\\\ = 283,000\\\\\text{EPS Post Merger} =\frac{\text{Stultz Corp Post Merger Earnings}}{\text{Number of Shares Post Merger}}$

                            $= \frac{1,220,000}{283,000} \\\\= \ 4.311$