Use the Information for the Question(s)below

question 27

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.
-If Martin pays no premium to acquire Luther,what will the earnings per share be after the merger?

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Definitions:

Organizational Authority

The power vested in a role or roles within an organization to make decisions, direct tasks, and enforce rules.

Legitimate

Something that is legal, rightful, and in accordance with recognized or accepted standards or principles.

Coercive

Exerting or utilizing force, authority, or pressure in order to achieve compliance or control.

Legal Contract

A formal agreement between two or more parties, enforceable by law, outlining obligations and rights.