The post-merger earnings per share for Barnes Enterprises. Introduction: Earnings per share (EPS): It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

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Answer 1

Question

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

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We are to choose the dividend payment policy in the company in such a way as to maintain the current market value (price) of the company. There are two dividend payment models to choose from: fixed dividend and the Gordon model. Please indicate how much (in percentage points) should the nearest fixed dividend be higher than the nearest dividend paid according to the Gordon model, if we assume that the increase in profits of the company (to be distributed among shareholders) will be at the level of 1.5% each year and we assume that the discount rate in this market will be 7%. Calculate the fixed dividend if the nearest dividend according to the Gordon model is 10 PLN. В I

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In case of a corporation, if the share holders want the dividend payout ratio to increase and management team wants to hold all the profit, what do we call this kind of a problem. Explain all the possible solutions for this problem in detail.

Answer 2

Question

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

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Answer 3

Question

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

Expert Solution & Answer

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Answer 4

Question

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

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Answer 5

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

Answer 6

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

Answer 7

Chapter 20, Problem 6P

a.

Summary Introduction

To calculate: The post-merger earnings per share for Barnes Enterprises.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

Answer 8

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

Answer 9

b.

Summary Introduction

To explain: The reasons that the EPS of Barnes Enterprises changed.

Introduction:

Earnings per share (EPS):

It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to pay a higher price for one share of the company.Â

Answer 10

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

Answer 11

c.

Summary Introduction

To determine: Whether Barnes Enterprises would be at a better state after the merger.

Introduction:

Merger:

An agreement between two already existing companies that combines them to form one single company is termed as a merger. This is done for expansion of business, its share in the market and value of shareholders.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 20 - Prob. 1DQ Ch. 20 - Prob. 2DQ Ch. 20 - Prob. 3DQ Ch. 20 - Prob. 4DQ Ch. 20 - What is synergy? What might cause this result? Is...Ch. 20 - Prob. 6DQ Ch. 20 - Prob. 7DQ Ch. 20 - Prob. 8DQ Ch. 20 - Prob. 9DQ Ch. 20 - Prob. 10DQ

The post-merger earnings per share for Barnes Enterprises. Introduction: Earnings per share (EPS): It is the profit per outstanding share of a public company. A higher EPS indicates a higher value of the company because investors are ready to a pay higher price for one share of the company.Â

Solution Summary: The author calculates the post-merger earnings per share for Barnes Enterprises because it has a higher P/E ratio than that of Noble Corporation.

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