ABC has earnings per share of 2 dollars. It has 10000 shares outstanding and is trading at 20 dollars per share. ABC is thinking of buying XYZ, which has earnings per share of 1.25 dollars, 4000 shares outstanding, and a price per share of 15 dollars. ABC will pay for XYZ by issuing new shares. There are no expected synergies from the transaction. Assume that ABC pays no premium to buy XYZ.

11(a):How many new shares will ABC have to issue to fund the deal?

Answer:

Question28

Question text

11(b):What are ABC's earnings per share after the merger? (Round your final answer to 2 decimal places if needed)