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Prior to the merger, Firm A has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Firm B
Prior to the merger, Firm A has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Firm B has $740 in total earnings with 220 shares outstanding at $21 per share. Assume Firm A acquires Firm B via an exchange of stock of 0.5 share of As stock for each share of B's stock. Both A and B have no debt outstanding and the merger does not create any synergy. What will the earnings per share of Firm A be after the merger? A) $1.67 B) $2.05 C) $2.10 D) $2.31 E) $3.36
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