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:

Planning Budget

A budget created for a specific period in the future, outlining expected revenue, expenses, and resource needs.

Vehicle Operating Cost

The total expense associated with maintaining and running a vehicle, including fuel, maintenance, insurance, and depreciation.

Snow-Day

A colloquial term typically referring to a day when schools or businesses are closed due to excessive snowfall that impedes travel and regular operations.

Other Expenses

Expenditures that are not directly related to the production of goods or services, such as administrative and selling expenses.