Prior to a potential merger Veggie Co has $6,150 in total earnings with 1800 shares outstanding at a market price per share of $41. Fruits Inc has $3,300 in total earnings witg 1,235 shares outstanding at $26 per share. Assume Veggie Co acquires Fruit Inc

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Prior to a potential merger Veggie Co has $6,150 in total earnings with 1800 shares outstanding at a market price per share of $41. Fruits Inc has $3,300 in total earnings witg 1,235 shares outstanding at $26 per share. Assume Veggie Co acquires Fruit Inc via an exchange of stock price of $28 for each share of Fruit Inc stock. Both companies have no debt outstanding. What will Veggie Co earnings per share be after the merger?

A) 3.58

B) 3.32

C) 2.67

D) 3.04

E) 3.95

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