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1. Consider the following premerger information about Firm A and Firm B: Firm A Firm B Total earnings $930 $650 Shares outstanding 620 210 Price
1. Consider the following premerger information about Firm A and Firm B: Firm A Firm B Total earnings $930 $650 Shares outstanding 620 210 Price per share $40 $20 Assume that Firm A acquires Firm B via an exchange of stock at a price of $25 for each share of B's stock. Both A and B have no debt outstanding. What will the earnings per share of Firm A be after the merger? (10 marks)
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