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Question
First National Bank's stock is currently selling at $40 per share and the bank recently reported earnings per share of $4.50 on its 200,000 shares outstanding. Second National Bank has 150,000 shares outstanding, with a current market price of $30 per share. It just reported its earnings per share of $5. If First National acquires Second National in a stock purchase, with the two banks agreeing to exchange stock at the current market prices, and post-merger earnings are expected to be $1,800,000, what is the expected EPS post merger?
A. $4.36
B. $5.76
C. $5.28
D. $5.14
E. None of the options is correct
Answer
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