Martin Manufacturing has earnings per share (EPS) of $3.00, 5 million shares outstanding, and a share price of $32. Martin is considering buying Luther Industries, which has earnings per share of $2.50, 2 million shares outstanding, and a share price of $20. Martin will pay for Luther by issuing new shares. There are no expected synergies from the transaction. Assume that Martin pays no premium to acquire Luther.
Calculate Martin's price-earnings (P/E) ratio post merger.
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Martin Manufacturing has earnings per share (EPS) of $3.00, 5 million shares outstanding, and a shar...
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