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a) The value for a (earnings after merger A) to the nearest whole number is? b) The value for b (earnings after merger B) to

image text in transcribeda) The value for a (earnings after merger A) to the nearest whole number is?

b) The value for b (earnings after merger B) to the nearest whole number is?

c) The value for c (eps after merger A) to the nearest cent is?

d) The value for d (eps after merger B) to the nearest cent is?

The scenario below applies to this and the following 8 questions: Bootstrapping earnings. Assume that Firm 1 issues additional shares to buy Firm 2 In scenario A, assume that the market applies the pre-merger P/E of Firm 1 to post-merger earnings. In Scenario B, assume that the market applies the weighted average P/E of the Firm 1 and Firm 2 to the post-merger company. (Weighted average P/E is calculated by multiplying the PE of each firm by its share of combined earnings and summing the two results.) Post- Firm 1 Firm 2 Post- merger A merger B b $80 a $200 100 $2 80 120 120 $1 C d Earnings Number of shares Earnings per share P/E Price per share Market value of stock 20 20 $40 10 $10 f. g $4,000 $800 h . i The value for a to the nearest whole number. Do not use $ sign. The scenario below applies to this and the following 8 questions: Bootstrapping earnings. Assume that Firm 1 issues additional shares to buy Firm 2 In scenario A, assume that the market applies the pre-merger P/E of Firm 1 to post-merger earnings. In Scenario B, assume that the market applies the weighted average P/E of the Firm 1 and Firm 2 to the post-merger company. (Weighted average P/E is calculated by multiplying the PE of each firm by its share of combined earnings and summing the two results.) Post- Firm 1 Firm 2 Post- merger A merger B b $80 a $200 100 $2 80 120 120 $1 C d Earnings Number of shares Earnings per share P/E Price per share Market value of stock 20 20 $40 10 $10 f. g $4,000 $800 h . i The value for a to the nearest whole number. Do not use $ sign

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