Question

earnings per share

Firm XY is planning on merging with Firm YZ. Firm XY will pay Firm YZ's shareholders the current value of their shares in shares of Firm XY. Firm XY currently has 39 000 shares outstanding at a market price of R40 a share. Firm YZ has 22 000 shares outstanding at a price of R17 a share. The after-merger earnings will be R78 000.

What will the earnings per share be after the merger?


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