Big Ltd has a current market value of $30 million and earns $2,700,000 annually, while...
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Big Ltd has a current market value of $30 million and earns $2,700,000 annually, while Little Ltd has a market value of $5 million and annual earnings of $1 million per year. If the companies merge an additional cash flow of $120644 would result next year. The merged firm will have 7 million shares. The merged firm's earnings in the first year will comprise the pre-merged earnings of each firm plus the additional cashflow mentioned above. If the post-merged firm's P/E ratio is expected to be 18 what is the expected market price per share using the P/E method? Please round your answer to the nearest whole cent but exclude the $ or , when typing your answer. (i.e. $11.205 should be typed as 11.21).
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