Alpha Is Planning on Merging with Beta

question 89

Multiple Choice

Alpha is planning on merging with Beta.Alpha will pay Beta's shareholders the current value of their stock in shares of Alpha.Alpha currently has 4,200 shares of stock outstanding at a market price of $40 a share.Beta has 2,500 shares outstanding at a price of $18 a share.The after-merger earnings will be $8,800.What will the earnings per share be after the merger?

• A)$1.61
• B)$1.65
• C)$1.75
• D)$1.81
• E)$1.86

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