Koala Technologies Is Considering the Acquisition of Laser Industries in a Stock-For-Stock

Koala Technologies is considering the acquisition of Laser Industries in a stock-for-stock exchange.Selected financial data for the two companies is shown below.An immediate synergistic earnings benefit of $2.5 million is expected in this merger.
$$\begin{array} { l r r r } \text { Sales (millians) } & \frac { \text { Kala } } { \$ 90 } & \frac { \text { Leser } } { \$ 10 } \\\text { Net income (millions) } & \$ 9.4 & \$ 1.2 \\\text { Camman shares autstanding (millians) } & 4.0 & 0.8 \\\text { Earning per share } & \$ 2.35 & \$ 1.50 \\\text { Camnan stack (arice per share) } & \$ 35.00 & \$ 27 \text {.0] }\end{array}$$
Calculate the postmerger EPS if the Laser shareholders accept an offer of $33.25 a share in a stock-for-stock exchange.

A) $2.21
B) $2.25
C) $2.75
D) $2.23

Correct Answer:

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