Use the Following Information to Answer the Question(s)below

question 17

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metal has earnings per share of $2.It has 10 million shares outstanding and is trading at $20 per share.Rearden Metal is thinking of buying Associated Steel,which has earnings per share of $1.25,4 million shares outstanding,and a price per share of $15.Rearden Metal will pay for Associated Steel by issuing new shares.There are no expected synergies from the transaction.
-If Rearden offers an exchange ratio such that,at current pre-announcement share prices for both firms,the offer represents a 20% premium to buy Associated Steel,then the price per share of the combined corporation after the merger will be closest to:

• A)$19.12.
• B)$20.00.
• C)$26.00.
• D)$17.20.

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Definitions:

Marketing Research

A set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas.

Problem Needs

Identifiable requirements or gaps that a target audience or market has, which can drive the creation of new products or services.

Unstructured Questions

Open-ended questions that allow respondents to answer in their own words.

Data Warehousing

The electronic storage of a large amount of information by a business, organization, or government, centralized for easy access and analysis.