Use the Following Information to Answer the Question(s) Below

question 47

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25, 4 million shares outstanding, and a price per share of $15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction.
-If Rearden pays no premium to buy Associated Steel, then Rearden's earnings per share after the merger will be closest to:

• A) $1.85
• B) $1.90
• C) $2.00
• D) $2.25

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Definitions:

Mindful Meditation

A meditation practice focusing on being intensely aware of what you're sensing and feeling in the moment, without interpretation or judgment.

Nonjudging

The practice of refraining from passing judgment or criticism, often emphasized in mindfulness and therapeutic settings.

Acceptance

The process of acknowledging and embracing reality, situations, or characteristics without trying to change them.

Positive Individual Traits

Characteristics or qualities that contribute to an individual's overall positive impact on themselves and others, often related to personality, behavior, and attitude.