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The following information concerns questions 4-5. Consider two corporations that both have earnings of $5 per share. The first firm, UpperCanada Enterprises, is a mature

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The following information concerns questions 4-5. Consider two corporations that both have earnings of $5 per share. The first firm, UpperCanada Enterprises, is a mature company with few growth opportunities. It has 1 million shares currently outstanding priced at $60 per share. The second company, LowerCanada Corpora- tion, is a young company with much more lucrative growth opportu- nities. Consequently, it has a higher value: Although it has the same number of shares oustanding, its stock price is $100 per share. As- sume LowerCanada acquires Upper-Canada using its own stock and the takeover adds no value. 4. Given the above information, what are LowerCanada's earnings per share after the takeover? A. $5.50 per share. B. $7.25 Per share. C. $8.50 per share. D. $6.25 per share, F. None of the above, 5. Given the above information, what is LowerCanada's P/E ratio after the takeover? A. 30. B. 20. C. 18. D. 16. E. None of the above

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