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DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total
DEF stockholders are paid the current market value of their firm in the form of ABC stock. Both firms are 100% equity-financed. The total earnings of the combined firm $77,000. EPS Price per share PE Number of shares Total earnings Total value ABC before merger $2.48 $25 10.08 25,000 $62,000 $625,000 What are the earnings per share after the merger? DEF before $1.67 $15 9 9,000 $15,000 $135,000
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
14th edition
133879879, 978-0133879872
