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Ratio of exchange and EPS ?Marla’s Cafe is attempting to acquire the Victory Club. Certain financial data on these corporations are summarized in the following table. ?
|
Item |
?Marla’s Cafe |
Victory Club |
|||
|
Earnings available for common stock |
?$50,000 |
?$8,000 |
|||
|
Number of shares of common stock outstanding |
30,000 |
6,000 |
|||
|
Market price per share |
?$20 |
?$33 |
|||
?Marla’s Cafe has sufficient authorized but unissued shares to carry out the proposed merger. If the ratio of exchange is 2.2?, what will be the earnings per share? (EPS) based on the original shares of each? firm?
The EPS for? Marla’s original shareholders after the merger is?______. ? (Round to three decimal? places.)
The EPS for? Victory’s original shareholders after the merger is?_____ (Round to three decimal? places.)
