Question
Ratio of exchange and EPS Marla's Cafe is attempting to acquire the Victory Club. Certain financial data on these corporations are summarized in the following
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. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
Item | Marla's Cafe | Victory Club |
| ||
Earnings available for common stock | $40 comma 00040,000 | $5 comma 5005,500 | |||
Number of shares of common stock outstanding | 20 comma 00020,000 | 7 comma 0007,000 | |||
Market price per share | $1717 | $3333 |
Marla's Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is
22,
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
$nothing.
(Round to three decimal places.)
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