Question: Firm X has $ 1 , 2 5 0 in total earnings with 7 5 0 shares outstanding at a market price per share of

Firm X has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Firm Y has $740 in total earnings with 220 shares outstanding at $18 per share. Assume Firm X acquires Firm Y via an exchange of stock at a price of $20 for each share of Firm Ys stock. Both Firm X and Firm Y have no debt outstanding. What will Firm Xs earnings per share be after the merger?
Multiple Choice
$2.10
$1.86
$1.95
$2.02
$2.33

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