Online Educ has an EPS of £5, with 12 million shares outstanding

Finance Jan 24, 2021

Online Educ has an EPS of £5, with 12 million shares outstanding. The shares are trading at £13 each. It is thinking of acquiring ClassRoom that has an EPS of £1, with 10 million shares outstanding which are trading at £12 each. How many shares (in millions) would OnlineEduc need to issue to buy ClassRoom ?

Select one:
a. 6.93
b. 21.23
c. 11.53
d. 9.23

Expert Solution

# of shares to be issued = Value of Classroom / Share price of Online Educ

# of shares to be issued = 10 M * 12 / 13

# of shares to be issued = 9.23 M Option D

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote