What is the pro forma EPS post-acquisition for Company A?

To determine the pro forma EPS post-acquisition for Company A, it's crucial to first understand that pro forma EPS is calculated based on both the earnings of the acquiring company and the target company, adjusted for the impact of the acquisition.

The correct answer being $2.42 per share indicates that this figure is derived from a detailed analysis that includes the pro forma net income after accounting for any cost synergies, increased interest expenses due to potential debt financing, and the number of shares outstanding post-acquisition. This comprehensive calculation typically combines both companies' earnings, accounts for adjustments related to the acquisition, such as amortization of intangible assets, and considers the actual number of shares after the acquisition closes.

The selection of this value suggests that the adjustments made for the acquisition brought the per-share earnings to a robust level, reflecting the expected increase in the combined entity's profitability or effective cost management resulting from the merger.

Understanding how these figures are derived involves a strong grasp of the underlying financial statements, shares outstanding, and the anticipated performance of both companies post-merger. This knowledge is essential for accurately calculating pro forma EPS and assessing the viability of the acquisition for stakeholders.