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Consider the following premerger Information about Firm A and Firm B: Total earnings Shares outstanding Price per share Firm A Firm B $ 1,600 $
Consider the following premerger Information about Firm A and Firm B: Total earnings Shares outstanding Price per share Firm A Firm B $ 1,600 $ see 1,100 3ee $ 43 $ 47 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? (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-earings 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 Abe after the merger? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price per share $ d-2. If there are no synergy gains, what will the price-earnings ratlo be? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price-earnings times
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