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Please answer the following questions with a clear explanation of the calculation. Thank you in advance. Given the following case, answer questions 6 and 8
Please answer the following questions with a clear explanation of the calculation.
Thank you in advance.
Given the following case, answer questions 6 and 8 below: Houston Inc. currently has 2,500 shares outstanding each sold for $75, whereas, Tetra Co. has 2,000 shares outstanding each sold for $50. The earnings per share for Houston Inc. and Tetra Co. is $13 per share. Houston Inc. decides to acquire Tetra Co. by offering two new shares of Houston Inc. for every four shares of Tetra Co. Assume that the merger increases the value of the combined firms by $200,000. 6. What is the Earning Per Share for Houston Inc. after merger?* $13 per share O $15.85 per share $16.71 per share O $14.23 per share None of the above 7. What is the price earnings ratio of Houston Inc. after the merger? * 4.91 O a 0 3.73 4.58 0 5.89 O None of the above 8. What is the cost of the merger (approximately)? * Zero O $39,285 $42,890 O $45,960 None of the aboveStep by Step Solution
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