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:

Product Costs

Direct costs attributable to the creation of a product, including direct labor, materials, and manufacturing overhead.

Cost Standards

Cost standards refer to pre-determined costs for products, operations, or projects, used as benchmarks for measuring actual performance or costs.

Accountants

Professionals who perform accounting, auditing, and other financial operations for businesses or individuals.

Spoilage

The portion of raw materials or inventory that becomes unusable or unsellable during production.