Firm X Is Planning on Merging with Firm Y

question 84

Multiple Choice

Firm X is planning on merging with Firm Y. Firm X will pay Firm Y's stockholders the current value of their stock in shares of Firm X. Firm X currently has 3,900 shares of stock outstanding at a market price of $40 a share. Firm Y has 2,200 shares outstanding at a price of $17 a share. The after-merger earnings will be $7,800. What will the earnings per share be after the merger?

• A) $1.61
• B) $1.67
• C) $1.75
• D) $1.81
• E) $1.86

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Definitions:

Silent Cinema

Refers to films made without synchronized recorded sound, particularly those produced before the advent of sound film in the late 1920s.

Pop-Culture

Aspects of culture (such as music, art, literature, fashion, and technology) that are widely favored or well-liked by many people, especially younger generations.

Technological Curio

An object or concept that evokes interest because of its novelty, uniqueness, or because it represents a particular technological innovation or oddity.

Vaudeville

A genre of variety entertainment in the United States and Canada from the early 1880s until the early 1930s, featuring a mixture of specialty acts such as comedy, song, and dance.