Tangshan Mining Is Attempting to Acquire Zhengsen Mining

question 23

Multiple Choice

Tangshan Mining is attempting to acquire Zhengsen Mining. Selected financial data is presented for both companies in the table below: Tangshan Mining has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 1.8, what will be the EPS of the merged firm?

• A) $1.00
• B) $1.03
• C) $1.08
• D) $2.00

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Definitions:

Retired

In accounting and finance, this term often indicates that an asset has been taken out of service or that a debt instrument, like a bond, has been paid off and is no longer in circulation.

Bonds Payable

Bonds payable refers to the amount of money a company owes to holders of its bonds, representing a long-term debt obligation.

Credit Cash

An accounting entry that represents an increase in cash or cash equivalents, indicating funds being added to the company’s assets.

Bond Interest Expense

The cost incurred by an issuer of bonds for the interest required to be paid to bondholders.