Use the Information for the Question(s)below

question 30

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.
-Assume that Martin pays no premium to acquire Luther.Calculate Martin's price-earnings (P/E)ratio both pre- and post-merger.

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Definitions:

Political Influence

The impact that individuals, groups, or organizations have on political decisions, policies, and the legislative process.

Housing Prices

The cost associated with buying or renting a home, which can fluctuate based on location, demand, economy, and other factors.

Mortgage Lending Standards

Regulations and criteria used by lenders to determine the eligibility of borrowers and the terms of mortgage loans.

Economic Crisis

A period of financial instability which may involve a recession, high unemployment, and a steep decline in market value of assets.