Prior to the merger, Firm A has $1,250 in total earnings with 750 shares outstanding at a
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Prior to the merger, Firm A has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Firm B has $740 in total earnings with 220 shares outstanding at $21 per share. Assume Firm A acquires Firm B via an exchange of stock of 0.5 share of A's stock for each share of B's stock. Both A and B have no debt outstanding and the merger does not create synergy. What will the earnings per share of Firm A be after the merger?
A) $2.10 B) $1.67 C) $3.36 D) $2.05 E) $2.31
Related Book For
Corporate Finance
ISBN: 9781265533199
13th International Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
Posted Date: