How many new shares must depaul industry issue to complete


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?

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