Koala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange. Selected financialdata for the two companies is shown below. An immediate synergistic earnings benefit of $2.5 million is expected inthis merger.Sales (millions)Net income (millions)Koala$90$9.4O a. $2.23O b. $2.75O c. $2.25O d. $2.21Laser$10$1.2Common shares outstanding (millions) 4.00.8Earnings per share$2.35$1.50Common stock (price per share) $35.00$27.00Calculate the post-merger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchange

Current price per share of Koala = 35Offer price per share for Laser = 33.25Exchange ratio= Offer…

Koala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange. Selected financial data for the two companies is shown below. An immediate synergistic earnings benefit of $2.5 million is expected in this merger. Sales (millions) Net income (millions) Koala $90 $9.4 Laser $10 $1.2 Common shares outstanding (millions) 4.0 0.8 Earnings per share $2.35 $1.50 Common stock (price per share) $35.00 $27.00 Calculate the post-merger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchange.

Koala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange. Selected financial data for the two companies is shown below. An immediate synergistic earnings benefit of $2.5 million is expected in this merger. Sales (millions) Net income (millions) Koala $90 $9.4 Laser $10 $1.2 Common shares outstanding (millions) 4.0 0.8 Earnings per share $2.35 $1.50 Common stock (price per share) $35.00 $27.00 Calculate the post-merger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchange.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 7P

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