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Consider the following premerger information about Firm A and Firm B: Total earnings Shares outstanding Price per share Pirm A Firm B $ 2,900 $1,000

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Consider the following premerger information about Firm A and Firm B: Total earnings Shares outstanding Price per share Pirm A Firm B $ 2,900 $1,000 900 250 s 31 $ 35 Assume that Firm A acquires Firm 8 via an exchange of stock at a price of $37 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? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) EPS $ 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 price-earnings ratio does not change)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g 32.16.) Price per share c. What will the price-earnings ratio of the postmerger firm be if the market correctly analyzes the transaction? (Do not round intermediate calculations and round your answer to 2 decimal places,e.g, 32.16.) Price-earnings times d-1. If there are no synergy gains, what will the share price of A be after the merger? (Do not round intermediate calculations and round your answer to 2 decimal places, e.q. 32.16.)

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