-Assume Company a Pays a 20% Premium for Company B

question 77

Multiple Choice

$$\begin{array} { l r r } &\underline{ \text { Company A }} &\underline{ \text { Company B }} \\\text { Total earnings } & \$ 2,000,000 & \$ 1,000,000 \\\text { Number of shares outstanding } & 400,000 & 100,000 \\\text { Earnings per share } & \$ 5.00 & \$ 10.00 \\\text { Price/earnings } & 6 \mathrm { X } & 3 \mathrm { X } \\\text { Market price/share } & 30.00 & \$ 30.00\end{array}$$
-Assume Company A pays a 20% premium for Company B in a pooling of interests' transaction.Calculate the post-merger EPS for Company

• A) $10.00
• B) $5.00
• C) $7.50
• D) $6.00

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Definitions:

Mass

An assessment of how much matter an object holds, often measured in grams or kilograms.

Density

The mass per unit volume of a substance, commonly expressed in grams per cubic centimeter (g/cm³) or kilograms per cubic meter (kg/m³).

Volume

The amount of space that a substance or object occupies, or that is enclosed within a container, typically measured in cubic units.

Mass

A measure of the amount of matter in an object, a fundamental property that affects the object's inertia and gravitational interaction.