Market Value Impact Exchange ratio $40/$60 667 Market price exchange ratio =$60 X. 667/$30=1.33 Surviving Company. Total earnings $26,000,000 Shares outstanding 7333333 Earnings per share $355 Price/earnings ratio 18 Market price per share $63.90 New shares from exchange = 666667 X 2,000,000 =1333333 23-1823-18 Market Value Impact Exchange ratio = $40 / $60 = .667 Market price exchange ratio = $60 x .667 / $30 = 1.33 Total earnings $26,000,000 Shares outstanding* 7,333,333 Earnings per share $3.55 Price / earnings ratio 18 Market price per share $63.90 Surviving Company * New shares from exchange = .666667 x 2,000,000 = 1,333,333