EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table. Henry Company is considering merging with Mayer by swap-ping 1.25 shares of its stock for each share of Mayer stock. Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging. Item                                                                Henry company            Mayer Services Earnings available for common stock                      $225,000        $50,000           Number of shares of common stock outstanding    $90,000         $15,000 Market price per share                                                  $45                     $50    d. Calculate the postmerger earnings per share (EPS) for Henry Company?

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EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table. Henry Company is considering merging with Mayer by swap-ping 1.25 shares of its stock for each share of Mayer stock.
Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging.

Item                                                                Henry company            Mayer Services

Earnings available for common stock                      $225,000        $50,000          

Number of shares of common stock outstanding    $90,000         $15,000

Market price per share                                                  $45                     $50 

 

d. Calculate the postmerger earnings per share (EPS) for Henry Company?

 

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