Firm J is acquiring Firm K by exchanging 30,000 of its shares for all of the shares

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Firm J is acquiring Firm K by exchanging 30,000 of its shares for all of the shares in Firm K. The total earnings, shares outstanding, and price per share for the two firms are presented in the following table.

Firm J

Firm K

Total earnings

1,200,000 600,000

Shares outstanding

120,000 750000

Price per share

49 38

1,What is the cost of the merger if the merged firm is worth $8.4 million?

What is the Earnings Per Share (EPS) of the merged firm?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

Posted Date: Dec 28, 2022 11:37 AM

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Firm J is acquiring Firm K by exchanging 30,000 of its shares for all of the shares

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Fundamentals of Corporate Finance

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