The EPS (Earnings per Share) of Firm A after a merger Introduction: The EPS is the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

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Answer 1

Question

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

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Effects of a Stock Exchange [LO3] Consider the following premerger information about Firm A and Firm B: Total earnings Shares outstanding Price per share Firm A $4,350 1,600 $ 43 Firm B $1,300 400 $ 47 Assume that Firm A acquires Firm B via an exchange of stock at a price of $49 for each share of B's stock. Both Firm A and Firm B have no debt outstanding. a. What will the earnings per share (EPS) of Firm A be after the merger? b. What will Firm A's price per share be after the merger if the market incorrectly analyzes this reported earnings growth (that is, the price-earnings ratio does not change)? c. What will the price-earnings ratio of the postmerger firm be if the market cor- rectly analyzes the transaction? d. If there are no synergy gains, what will the share price of Firm A be after the merger? What will the price-earnings ratio be? What does your answer for the share price tell you about the amount Firm A bid for Firm B? Was it too high? Too low? Explain.

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What effect will a two-for-one stock split have on the following items found on a firm's financial statements? a. Earnings per share $5.00. Round your answer to the nearest cent. Initial amount $5.00 $ b. Total equity $10,000,000. Round your answer to the nearest dollar. Initial amount $ New amount Initial amount $4,000,000 New amount $10,000,000 c. Long-term debt $4,600,000. Round your answer to the nearest dollar. Effect $ New amount Effect Initial amount $4,600,000 $ d. Additional paid-in capital $1,689,000. Round your answer to the nearest dollar. Effect New amount $ New amount -Select- Effect New amount Initial amount $1,689,000 e. Number of shares outstanding 800,000. Round your answer to the nearest whole number. Initial amount 800,000 f. Earnings $4,000,000. Round your answer to the nearest dollar. Effect -Select- -Select- -Select- Effect -Select- -Select-

Answer 2

Question

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

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Answer 3

Question

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Expert Solution & Answer

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Answer 4

Question

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Expert Solution & Answer

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Answer 5

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 6

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 7

Chapter 26, Problem 10QP

a)

Summary Introduction

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 8

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 9

b)

Summary Introduction

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 10

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 11

c)

Summary Introduction

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 12

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 13

d)

Summary Introduction

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Answer 14

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Answer 15

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Answer 17

Ch. 26.1 - Prob. 26.1ACQ Ch. 26.1 - Prob. 26.1BCQ Ch. 26.2 - Prob. 26.2ACQ Ch. 26.2 - Prob. 26.2BCQ Ch. 26.3 - Prob. 26.3ACQ Ch. 26.3 - Prob. 26.3BCQ Ch. 26.4 - Prob. 26.4ACQ Ch. 26.4 - Prob. 26.4BCQ Ch. 26.5 - Prob. 26.5ACQ Ch. 26.5 - Prob. 26.5BCQ

The EPS (Earnings per Share) of Firm A after a merger Introduction: The EPS is the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Solution Summary: The author explains how to calculate the EPS of Firm A after a merger.

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Want to see the full answer?

Chapter 26 Solutions

The EPS (Earnings per Share) of Firm A after a merger Introduction: The EPS is the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Solution Summary: The author explains how to calculate the EPS of Firm A after a merger.

To calculate: The EPS (Earnings per Share) of Firm A after a merger Introduction: The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change. Introduction: The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction. Introduction: The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The share price of Firm A after the merger, and the price-earnings ratio. Introduction: The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

Want to see the full answer?

Chapter 26 Solutions

To calculate: The EPS (Earnings per Share) of Firm A after a merger

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The price per share for Firm A, if the ratio of price-earnings does not change.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The price-earnings ratio after the merger, assuming that the market correctly analyzes the transaction.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.

To calculate: The share price of Firm A after the merger, and the price-earnings ratio.

Introduction:

The EPSis the part of the profit of a firm that is allocated to every outstanding share of common stock. It indicates the profitability of the company.