-Which of the Following Would Be True Concerning the EPS

question 2

Multiple Choice

$$\begin{array} { l r r } &\underline{ \text { Company A }} &\underline{ \text { Company B }} \\\text { Total earnings } & \$ 2,000,000 & \$ 1,000,000 \\\text { Number of shares outstanding } & 400,000 & 100,000 \\\text { Earnings per share } & \$ 5.00 & \$ 10.00 \\\text { Price/earnings } & 6 \mathrm { X } & 3 \mathrm { X } \\\text { Market price/share } & 30.00 & \$ 30.00\end{array}$$
-Which of the following would be true concerning the EPS of Company A.in 5 years? Company A's EPS would be:

• A) higher due to the merger.
• B) the same with or without the merger.
• C) lower without the merger.
• D) lower with the merger.

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Definitions:

Spinning Bees

Social gatherings in colonial America where women met to spin yarn, weave, and engage in communal work while socializing.

Stamp Act

A British law enacted in 1765 requiring the use of stamped paper for official documents in the American colonies, leading to widespread protest.

Nonimportation Movement

A series of commercial restrictions adopted by American colonists to protest British policies before the American Revolution, specifically targeting goods imported from Britain.

Grenville

Was a British Whig statesman who served as Prime Minister of Great Britain in the mid-18th century, known for his policy of taxing the American colonies, leading to unrest.