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Firm A buys Firm B in a stock-for-stock transfer based on Firm A's offer of $70 per share of Firm B. Assume there are no

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Firm A buys Firm B in a stock-for-stock transfer based on Firm A's offer of $70 per share of Firm B. Assume there are no synergistic benefits to the merger. Firm A Firm B Present Earnings $50 million S40 milion Shares 5 million 10 million EPS $ 10 $ 4 Market Price of Stock $140 $ 40 P/E Ratio 14 10 The post-merger EPS for the former stockholders in B. per an equivalent former share of firm B held, is: a. 518.60 $6.00 $9.00 d. 54.50

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