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Artist 52 [7]
2 years ago
6

Prior to the merger, Firm A has $1,250 in total earnings with 750 shares outstanding at a market price per share of $42. Firm B

has $740 in total earnings with 220 shares outstanding at $21 per share. Assume Firm A acquires Firm B via an exchange of stock of 0.5 share of A’s stock for each share of B's stock. Both A and B have no debt outstanding and the merger does not create any synergy. What will the earnings per share of Firm A be after the merger? A) $2.10 B) $1.67 C) $3.36 D) $2.05 E) $2.31
Business
1 answer:
Julli [10]2 years ago
6 0

Answer:

E) $2.31

Explanation:

Shares offered to Firm B = Shares outstanding * 0.5

= 220 * 0.5

= 110 shares

Total shares of firm A after merger = Shares outstanding before merger + Shares offered to Firm B

= 750 + 110

= 860 shares

Total earnings of firm A after merger = $1,250 + 740

Total earnings of firm A after merger = $1,990

Earnings per share of firm A after merger = Total earnings of firm A after merger / Total shares of firm A after merger

Earnings per share of firm A after merger = $1,990 / 860

Earnings per share of firm A after merger = $2.31 per share

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Answer:

Current Operation (purchase of cookies) - $0.60

Alternative - $0.2 materials

$0.15 direct labor

$0.45 without increasing capacity of which $0.3 is fixed - meaning it would still be incurred at current capacity

                        <u> Mel's Meals Evaluation of Alternatives</u>

                                       Purchase                                Produce

                                            $                                              $

Cost to Buy                        0.6                                             -

Materials                               -                                             0.2

Direct Labor                         -                                             0.15

Overhead (Variable)            -                                             0.15

Total Cost                            0.6                                          0.5

Decision: Mel should not continue buying them as she would be saving $0.1 for every lunch meal.

Since there would not be an increase in the total fixed overhead if Mel's makes the cookies in-house, then the $0.3 fixed overhead is not significant in calculating the cost of producing.

Explanation:

The differential cost in this instance is $0.1 as Mel's saves that for every cookie made which multiplied by the number included in the box and by the total box prepared and sold gives = 0.1 * 2 * 10000 = $2,000 saved for making

5 0
2 years ago
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Answer:

a. affective

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Therefore, option A is the correct answer.

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2 years ago
At a time when demand for ready-to-eat cereal was stagnant, a spokesperson for the cereal maker Kellogg’s was quoted as saying,
larisa86 [58]

Answer:

for interest rates equal to or lower than 200%, the firms will use trigger strategies to support the collusive level of advertising

Explanation:

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\frac{current \ period's \ profit \ of \ the \ cheating \ firm \ - \  firm's \  profit \  in \ each \ period \ under \ collision  }{ firm's \ profit \ in \  each \ period \ under \ collision \ - \ profit \ in  \ each \ subsequent \ period \ of \ cheating \ firm  } \leq \frac{1}{i}

where;

the \ current \ period's \ profit \ of \ the \ cheating \ firm \ = \ 49

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Then :

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Thus; for interest rates equal to or lower than 200%, the firms will use trigger strategies to support the collusive level of advertising

6 0
2 years ago
The government of a country must make a decision between increasing military spending and subsidizing wheat farmers. this kind o
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The decision that must the government of a country make and choose between increasing military spending and subsidizing wheat farmers is an example of <span>a guns or butter issue.
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2 years ago
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Answer:

B. less

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4 0
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