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

Required information Total earnings Number of shares outstanding Company A $2,000,000 400,000 Company B $1,000,000 100,000 Earnings per share $5.0 $10.00 Price/earnings Market price/share 6X $30.00 3X $30.00 Company A has a growth rate in EPS of 14%. Company B's growth rate in EPS is 10%. What is the post- merger growth rate assuming the facts as previously stated? (Assume no synergy.) Multiple Choice O 13.20% 10.88% O 12.00% 12.67% 13

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