Consider the Following Premerger Information About Firm a and Firm

question 74

Multiple Choice

Consider the following premerger information about Firm A and Firm B: $$\begin{array} { l r r } & { \text { Firm A } } & { \text { Firm B } } \\ \text { Total earnings } & \$ 930 & \$ 650 \\\text { Shares outstanding } & 620 & 210 \\\text { Price per share } & \$ 40 & \$ 20\end{array}$$ Assume that Firm A acquires Firm B via an exchange of stock at a price of $25 for each share of B's stock.Both A and B have no debt outstanding.What will the earnings per share of Firm A be after the merger?

• A)$1.60
• B)$1.86
• C)$1.95
• D)$2.02
• E)$2.10

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