Ratio of exchange and EPSMarla's Cafe is attempting to acquire the Victory Club. Certain financial data on these corporations are summarized in the following table.

Item Marla's Caf Victory Club

Earnings available for common stock $20,000 $5,000

Number of shares of common stock outstanding 60,000 6,000

Market price per share $15 $26

Marla's Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 1.6, what will be the earnings per share (EPS) based on the original shares of each firm?

The EPS for Marla's original shareholders after the merger is