Question
In: Accounting
Orion plc is determined to report earnings per share of 267p. It therefore acquires Mintaka plc....
Orion plc is determined to report earnings per share of 267p. It
therefore acquires
Mintaka plc. There are no gains associated with the acquisition. In
exchange for
Mintaka’s shares, Orion issues just enough of its own shares to
ensure its 267p
earnings per share objective.
Please find the following information:
OrionMintaka
Earnings per Share£2.00
£2.50
Price per Share
£40
£25
Price-Earnings Ratio20
10
Number of Shares100,000200,000
Earnings
£200,000£500,000
Market Value
£4,000,000£5,000,000
Required:
a)How many shares in the combined firm have to be offered for each
share in
Mintaka?
b)Derive the earnings per share, price per share, price-earnings
ratio, earnings,
and market value associated with the combined firm.
c)What is the cost of the acquisition to Orion?
d)What is the change in the market value of Orion’s shares that
were
outstanding before the acquisition?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Orion plc is determined to report earnings per share of 267p. It therefore acquires Mintaka plc....
Orion plc is determined to report earnings per share of 267p. It
therefore acquires Mintaka plc. There are no gains associated with
the acquisition. In exchange for Mintaka’s shares, Orion issues
just enough of its own shares to ensure its 267p earnings per share
objective.
Please find the following information:
Orion
Mintaka
Earnings per Share
£2.00
£2.50
Price per Share
£40
£25
Price-Earnings Ratio
20
10
Number of Shares
100,000
200,000
Earnings
£200,000
£500,000
Market Value
£4,000,000
£5,000,000...
World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim...
World Enterprises is determined to report earnings per share of
$2.67. It therefore acquires the Wheelrim and Axle Company. There
are no gains from merging. In exchange for Wheelrim and Axle
shares, World Enterprises issues just enough of its own shares to
ensure its $2.67 earnings per share objective.
World Enterprises
Wheelrim and Axle
Merged Firm
Earnings per share
$2.00
$2.50
$2.67
Price per share
$40
$25
$34.43
Price-earnings ratio
20
10
12.86
Number of shares
100,000
200,000
262,172
Total...
World Enterprises is determined to report earnings per share of $2.67, and therefore acquires the Wheelrim...
World Enterprises is determined to report earnings per share of
$2.67, and therefore acquires the Wheelrim and Axle Company. You
are given the following facts: World Enterprises Wheelrim and Axle
Merged Firm Earnings per share $2.00 $2.50 $2.67 Price per share
$40 $25 ? Price-earnings ratio 20 10 ? Number of shares 100,000
200,000 ? Total earnings $200,000 $500,000 ? Total market value
$4,000,000 $5,000,000 ? There are no gains from merging. In
exchange for Wheelrim and Axle shares, World...
World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim...
World Enterprises is determined to report earnings per share of
$2.67. It therefore acquires the Wheelrim and Axle Company. You are
given the following facts:
World
Enterprises
Wheelrim
and Axle
Merged Firm
Earnings per share
$
2.00
$
2.50
$2.67
Price per share
$
40
$
25
?
Price–earnings ratio
20
10
?
Number of shares
100,000
200,000
?
Total earnings
$
200,000
$
500,000
?
Total market value
$
4,000,000
$
5,000,000
?
There are no gains from merging....
World Enterprises is determined to report earnings per share of $2.80. It therefore acquires the Wheelrim...
World
Enterprises is
determined to report earnings per share of $2.80. It therefore
acquires the Wheelrim and Axle Company. There are no gains from
merging. In exchange for Wheelrim and Axle shares, World
Enterprises issues just enough of its own shares to ensure its
$2.80 earnings per share objective.
a. Complete the table below for the merged firm.
(Do not round intermediate calculations. Round "Price per
share" and "Price-earnings ratio" to 2 decimal places and other
answers to the nearest...
World Enterprises is determined to report earnings per share of $3.20. It therefore acquires the Wheelrim...
World Enterprises is determined to report earnings per share of
$3.20. It therefore acquires the Wheelrim and Axle Company. There
are no gains from merging. In exchange for Wheelrim and Axle
shares, World Enterprises issues just enough of its own shares to
ensure its $3.20 earnings per share objective.
a. Complete the table below for the merged
firm. (Do not round intermediate calculations. Round "Price
per share" and "Price-earnings ratio" to 2 decimal places and other
answers to the nearest...
Question 3 Sports plc expects this year earnings of £6 per share and plans to pay...
Question 3
Sports plc expects this year earnings of £6 per share and plans to
pay a £2.5
dividend per share, retaining the rest to reinvest in new projects
with an expected
return of 10% per year. Assuming that Sports plc will maintain the
same dividend
payout rate and return on new investments in the future and will
not change the
number of outstanding shares:
a) What is the earnings growth rate according to the plans of
Sports plc?
b)...
The SEC requires that firms report both basic and diluted earnings per share in their 10-K...
The SEC requires that firms report both basic and diluted
earnings per share in their 10-K reports. Why do firms’ basic EPS
and diluted EPS differ? Which EPS number is more informative to you
as an investor?
2. In Apple’s just-released financial report, it had an earnings per share of E0 = $4....
2. In Apple’s just-released financial report, it had an earnings
per share of E0 = $4. It has also
just paid dividend per share of D0 = $1. The risk-free rate is
0%, Apple stock's beta is 1, and
the expected market return is 10%. Currently, Apple has a stock
price of $100. You assume
Apple's dividend grows at a constant rate.
a. What is Apple's ROE implied by the dividend discount model?
(That is, you need to use the...
what was the earnings per common share
Net Income for the period totaled OMR75,000,preferred dividends paid totaled OMR10,000 and common dividends paid totaled OMR30,000.If there 100,000 common shares outstanding throughout the year.What was the earnings per common share
(a)44.50 OMR
(b)0.35 OMR
(c)0.65 OMR
(d) 4.50 OMR
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