Question
Consider the followingpre-mergerinformation about Firm A and Firm B: Firm A Firm B Total earnings $2,100 $750 Shares outstanding 900 300 Price per share $60
Consider the followingpre-mergerinformation about Firm A and Firm B:
| Firm A | Firm B | |
| Total earnings | $2,100 | $750 |
| Shares outstanding | 900 | 300 |
| Price per share | $60 | $12 |
Assume that Firm A acquires Firm B via an exchange of stock at a price of $13 for each share of B's stock. Both A and B have no debt outstanding.
What will the earnings per share, EPS, of Firm A be after the merger? ANDWhat will be the share price of A be after the merger if there are no synergy gains? Please show your work.
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Financial Management For Public Health And Not For Profit Organizations
Authors: Steven A. Finkler
2nd Edition
0131471988, 978-0131471986
