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ABC has earnings per share of $ 2 . It has 1 0 million shares outstanding and is trading at $ 2 0 per share.
ABC has earnings per share of $ It has million shares outstanding and is trading at $ per share. It is thinking of buying XYZ which has earnings per share of $ million shares outstanding, and a price per share of $ ABC will pay for XYZ by issuing new shares. There are no expected synergies from the transaction. ABC pays no premium to buy XYZ
Which of the following is closest to ABC's priceearnings ratio after the merger?
A $
B $
C $
D $
The correct answer is not sure how they got this answer tho
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