Consider the following premerger information about Firm A and Firm B:

Firm AFirm BTotal earnings$1,900$500Shares outstanding900250Price per share$37$41

Assume that Firm A acquires Firm B via an exchange of stock at a price of $43 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 ratiotimes

d-1If 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.g., 32.16.)

Price per share$

d-2What will the price-earnings ratio be?(Do not round intermediate calculations and round your answer to 2 decimal places,e.g., 32.16.)

Price-earnings ratiotimes

d-3What does your answer for the share price tell you about the amount A bid for B? Was it too high? Too low?

Too highToo low