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:

Serial-position Effect

A memory phenomenon in which recall accuracy varies as a function of an item's position in a study list, with better recall of items at the beginning and end.

Encoding Specificity

The theory that memory is enhanced when information available at encoding is also available at retrieval.

Interference Theory

The view that we may forget stored material because other learning interferes with it.

Serial-position Effect

A cognitive phenomenon where people tend to remember the first and last items in a series best, and the middle items worst.