DePaul industries has an EPS of $6 and 5M shares outstanding. Its closing price yesterday was $35 per share.
Loyola industries EPS of $4 and has 3M shares outstanding. Its closing price yesterday was $25 per share.
Both industries, after the close of market announced a friendly all-stock acquisition where DePaul industry has agreed to acquire each share of Loyola industry at 20% premium.
1) How many new shares must DePaul industry issue to complete the transaction?
2) What will the eps of the combined entity be after the merger?