- Please make sure you have a pen, paper and calculator to do the calculations. The total duration for this test is 60 Minutes. Question 16 Your firm purchases goods from its supplier on terms of 1/10, net 30 . The effective annual cost to your firm if it chooses not to take advantage of the trade discount offered is closest to: 16.8% 44.6% 20.1% 13.0% Rearden Metal has earnings per share of $2. It has 10 million shares outstanding and is trading at $20 per share. Rearden Metal is thinking of buying Associated Steel, which has earnings per share of $1.25,4 million shares outstanding, and a price per share of \$15. Rearden Metal will pay for Associated Steel by issuing new shares. There are no expected synergies from the transaction. If Rearden offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Associated Steel, then the price per share of the combined corporation after the merger will be closest to: $18.1 $21.5 $19.1 $17.5