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Required information Total earnings Number of shares Company A $2,000,000 400,000 Company B $1,000,000 100,000 outstanding Earnings per share $5.0 $10.00 Price/earnings 6X 3X

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Required information Total earnings Number of shares Company A $2,000,000 400,000 Company B $1,000,000 100,000 outstanding Earnings per share $5.0 $10.00 Price/earnings 6X 3X Market price/share $30.00 $30.00 Which of the following would be true concerning the EPS of Company A. in 5 years? Company A's EPS would be: Multiple Choice higher due to the merger. the same with or without the merger. lower without the merger. lower with the merger.

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