Use the Information for the Question(s) Below

question 55

Essay

Use the information for the question(s) below.
Martin Manufacturing has earnings per share (EPS) of $3.00, 5 million shares outstanding, and a share price of $32. Martin is considering buying Luther Industries, which has earnings per share of $2.50, 2 million shares outstanding, and a share price of $20. Martin will pay for Luther by issuing new shares. There are no expected synergies from the transaction.
-What are the possible managerial motives to merge?

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Definitions:

Rationalize

The process of attempting to logically justify behavior or attitudes that might otherwise be unacceptable or irrational.

Paraphrase

The act of rewording or rephrasing a text or statement to achieve clearer understanding without changing its original meaning.

Direction

Guidance or instructions on how to perform a task or reach a destination; also refers to the course along which someone or something moves.

Meaningless

Lacking in purpose, value, or significance.