a.

The acquired financial firms stock is selling in the market today at $14 per share, while

the acquiring institution's stock is trading at $20 per share. The acquiring firms stockholders

have agreed to extend to shareholders of the target firm a bonus of $5 per share. The acquired

firm has 30,000 shares of common stock outstanding, and the acquiring institution has 50,000

common equity shares. Combined earnings after the merger are expected to remain at their

premerger level of $1,625,000 (where the acquiring firm earned $1,000,000 and the acquired

institution $625,000). What is the postmerger EPS?