World Enterprises is determined to report earnings per share of $2.67. It therefore acquires the Wheelrim and Axle Company. There are no gains from merging. In exchange for Wheelrim and Axle shares, World Enterprises issues just enough of its own shares to ensure its $2.67 earnings per share objective.

	World Enterprises	Wheelrim and Axle	Merged Firm
Earnings per share	$2.00	$2.50	$2.67
Price per share	$40	$25	$34.43
Price-earnings ratio	20	10	12.86
Number of shares	100,000	200,000	262,172
Total earnings	$200,000	$500,000	$700,000
Total market value	$4,000,000	$5,000,000	$9,000,000

a. Complete the table below for the merged firm. b. How many shares of World Enterprises are exchanged for each share of Wheelrim and Axle? c. What is the cost of the merger to World Enterprises? d. What is the change in the total value of the World Enterprises shares that were outstanding before the merger?