DEF Stockholders Are Paid the Current Market Value of Their

question 32

Multiple Choice

DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm are $77,000. What are the earnings per share after the merger?

• A) $2.48
• B) $2.53
• C) $2.60
• D) $2.98
• E) $3.27

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Definitions:

Worried

Feeling anxious or troubled about actual or potential problems.

Overly Emotional

Describes an individual who experiences emotions more intensely or expresses them more freely than typically considered normal.