Consider the following pre-merger information about Firm A and Firm B : Assume that Firm A acquires Firm B via an exchange of stock at a price of $49 for each share of B's stock. Both A and B have no debt outstanding. a) What will the earnings per share (EPS) of Firm A be after the merger? (5 marks) b) What will Firm A's price per share be after the merger if the market incorrectly analyzes this reported earnings growth (that is, the P/E ratio does not change)? (5 marks) c) What will the P/E ratio of the post-merger firm be if the market correctly analyzes the transaction? (2 marks) d) If there are no synergy gains, what will the share price of A be after the merger? What will the P/E ratio be? What does your answer for the share price tell you about the amount A bid for B? Was it too high? Too low? Explain. (8 marks)