EPS and postmerger price Data for Henry Company and Mayer Services are given in the following table. Henry Company is considering merging with Mayer by swap-ping 1.25 shares of its stock for each share of Mayer stock.
Henry Company expects its stock to sell at the same price/earnings (P/E) multiple after the merger as before merging.
Item Henry company Mayer Services
Earnings available for common stock $225,000 $50,000
Number of shares of common stock outstanding $90,000 $15,000
Market price per share $45 $50
d. Calculate the postmerger earnings per share (EPS) for Henry Company?
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