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Assume the following financial data for Rembrandt Paint Co. and Picasso Art Supplies: Rembrandt Paint Co. Picasso Art Supplies Total earnings $ 648,000 $ 1,160,000
Assume the following financial data for Rembrandt Paint Co. and Picasso Art Supplies:
Rembrandt Paint Co. | Picasso Art Supplies | |||
Total earnings | $ | 648,000 | $ | 1,160,000 |
Number of shares of stock outstanding | 180,000 | 580,000 | ||
Earnings per share | $ | 3.60 | $ | 2.00 |
Price-earnings ratio (P/E) | 15X | 27X | ||
Market price per share | $ | 54 | $ | 54 |
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(a) | If all the shares of Rembrandt Paint Co. are exchanged for those of Picasso Art Supplies on a share-for-share basis, what will postmerger earnings per share be for Picasso Art Supplies? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Postmerger earnings per share | $ |
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