Question 4 25 points Saved Firm B As a financial analyst at Bank of America, you are analyzing the impact of the merger and acquisition on a company's financial performance. You collected the following data. Fim A Price per share $70.00 $15.00 Total earnings $700.00 $100.00 Share outstanding $200.00 $80.00 Total Value $14.000.00 $1,200.00 Suppose Company A will acquire Company T. Company will offer three new share of A for every four shares of T. (sample answer: 27.50) a. If investors are aware that there are no economic gains from the merger, what is the price-earnings ratio of A's stock after the merger? 18.98 Now suppose that the merger really does increase the value of the combined firm by $5000, please answer part b, c, and d b. what is the price-earnings ratio of A's stock after the merger? 25.22 (sample answer: 27.50) C. what is the final merger premium in dollar does Company A pay to Company T $3461 (sample answer: $450.50) d. what is the initial merger premium promised in dollar does Company A pay to Company T $2307.6 (sample answer: $450.50) Question 4 25 points Saved Firm B As a financial analyst at Bank of America, you are analyzing the impact of the merger and acquisition on a company's financial performance. You collected the following data. Fim A Price per share $70.00 $15.00 Total earnings $700.00 $100.00 Share outstanding $200.00 $80.00 Total Value $14.000.00 $1,200.00 Suppose Company A will acquire Company T. Company will offer three new share of A for every four shares of T. (sample answer: 27.50) a. If investors are aware that there are no economic gains from the merger, what is the price-earnings ratio of A's stock after the merger? 18.98 Now suppose that the merger really does increase the value of the combined firm by $5000, please answer part b, c, and d b. what is the price-earnings ratio of A's stock after the merger? 25.22 (sample answer: 27.50) C. what is the final merger premium in dollar does Company A pay to Company T $3461 (sample answer: $450.50) d. what is the initial merger premium promised in dollar does Company A pay to Company T $2307.6 (sample answer: $450.50)