Market Value Impact Example - Acquiring Company offers to acquire Bought Company with shares of common stock at an exchange price of $40 Acquiring Bought company Company Present earnings $20,000,000 $6,000,000 Shares outstanding 6,000.000 2,000,000 Earnings per share $333 $300 rice per share $6000 $3000 Price/earnings ratio 18 10 23-1723-17 Market Value Impact Example -- Acquiring Company offers to acquire Bought Company with shares of common stock at an exchange price of $40. Present earnings $20,000,000 $6,000,000 Shares outstanding 6,000,000 2,000,000 Earnings per share $3.33 $3.00 Price per share $60.00 $30.00 Price / earnings ratio 18 10 Acquiring Bought Company Company