Acquiring company is considering the acquisition of target company in a stock for stock transaction in which target company would receive $50.00 for each share of its common stock. the acquiring company does not expect any change in its price/earnings multiple after the merger.

acquiring co. target co.

earnings available for common stock $150,000 $30,000

number of shares of common stock outstanding $60,000 $20,000

market price per share $60.00 $40.00

using the information provided above on these two firms and showing your work, calculate the following:

1) what is the share exchange ratio?

2) how many new shares will be issued by acquiring company?

3) what is the post-merger eps of the combined company?

4) what is the post-merger share price of the combined company?

5) if the purchase is using 100% cash and all the cash is borrowed at an annual rate of 8%, what is post-merger eps of the combined company, assuming the tax rate is 40%?

During the first month of operations, martinson services, inc., completed the following transactions: jan 2 martinson services received $65,000 cash and issued common stock to the stockholders. 3 purchased supplies, $1,000, and equipment, $12,000, on account. 4 performed services for a customer and received cash, $5,500. 7 paid cash to acquire land, $39,000. 11 performed services for a customer and billed the customer, $4,100. martinson expects to collect within one month 16 paid for the equipment purchased january 3 on account. 17 paid for newspaper advertising, $600. 18 received partial payment from customer on account, $2,000. 22 paid the water and electricity bills, $430. 29 received $2,600 cash for servicing the heating unit of a customer. 31 paid employee salary, $2,900. 31 declared and paid dividends of $1,800. requirements 1. record each transaction in the journal. key each transaction by date. explanations are not required. 2. post the transactions to the t-accounts, using transaction dates as posting references. label the ending balance of each account bal, as shown in the chapter. 3. prepare the trial balance of martinson services, inc., at january 31 of the current year. 4. mark martinson, the manager, asks you how much in total resources the business has to work with, how much it owes, and whether january was profitable (and by how much)?

Job a3b was ordered by a customer on september 25. during the month of september, jaycee corporation requisitioned $2,400 of direct materials and used $3,900 of direct labor. the job was not finished by the end of the month, but needed an additional $2,900 of direct materials in october and additional direct labor of $6,400 to finish the job. the company applies overhead at the end of each month at a rate of 100% of the direct labor cost. what is the amount of job costs added to work in process inventory during october?

Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to: