$\begin{array}{lcc}
&\text { Company A }&\text {Company B }\
\text { Total earnings } & \$ 2,000,000 & \$ 1,000,000 \
\text { Number of shares outstanding } & 400,000 & 100,000 \
\text { Earnings per share } & \$ 5.00 & \$ 10.00 \
\text { Price/earnings } & 6 \mathrm{X} & 3 \mathrm{X} \
\text { Market price share } & \$ 30.00 & \$ 30.00
\end{array}$
-Assume Company A pays a 20% premium for Company B in a pooling of interests' transaction. Calculate the post merger
A) $10.00
B) $5.00
C) $7.50
D) $15.00
E)P.S. for Alpha.

Question

$\begin{array}{lcc}
&\text { Company A }&\text {Company B }\
\text { Total earnings } & \$ 2,000,000 & \$ 1,000,000 \
\text { Number of shares outstanding } & 400,000 & 100,000 \
\text { Earnings per share } & \$ 5.00 & \$ 10.00 \
\text { Price/earnings } & 6 \mathrm{X} & 3 \mathrm{X} \
\text { Market price share } & \$ 30.00 & \$ 30.00
\end{array}$ 
-Assume Company A pays a 20% premium for Company B in a pooling of interests' transaction. Calculate the post merger
A) $10.00
B) $5.00
C) $7.50
D) $15.00
E)P.S. for Alpha.

Quizplus · Accepted Answer

The Answer of $\begin{array}{lcc}
&\text { Company A }&\text {Company B }\
\text { Total earnings } & \$ 2,000,000 & \$ 1,000,000 \
\text { Number of shares outstanding } & 400,000 & 100,000 \
\text { Earnings per share } & \$ 5.00 & \$ 10.00 \
\text { Price/earnings } & 6 \mathrm{X} & 3 \mathrm{X} \
\text { Market price share } & \$ 30.00 & \$ 30.00
\end{array}$ 
-Assume Company A pays a 20% premium for Company B in a pooling of interests' transaction. Calculate the post merger
A) $10.00
B) $5.00
C) $7.50
D) $15.00
E)P.S. for Alpha.

-Assume Company a Pays a 20% Premium for Company B