Use the following information to answer the question(s) below. BPH Metal has earnings per share of $3. It has 10 million shares outstanding and is trading at $20 per share. BPH Metal is thinking of buying Quality Steel, which has earnings per share of $1.35, 4 million shares outstanding, and a price per share of $20. BPH Metal will pay for Quality Steel by issuing new shares. There are no expected synergies from the transaction.

What is BPH Steels earnings per share after the takeover?

If BPH pays no premium to buy Quality Steel, then BPH's price-earnings ratio after the merger will be closest to:

If BPH offers an exchange ratio such that, at current pre-announcement share prices for both firms, the offer represents a 20% premium to buy Quality Steel, then BPH's earnings per share after the merger will be closest to: ANSWER: Answer