Target Company is trading at $20 a share and has 1M shares outstanding. Acquirer Corp. is trading at $50 a share and has 2M shares outstanding.

Target Company is trading at $20 a share and has 1M shares outstanding. Acquirer Corp. is trading at $50 a share and has 2M shares outstanding. Acquirer offers Target’s shareholders of one share of its stock for every two shares of Target Company. For the year ending 12/31/06, Acquirer and Target had earnings of $5M and $2M, respectively. The book value of Target’s net assets is $12M and fair value is $15M as of 12/31/06. The book value of Acquirer’s net assets is $35M and fair value is $48M as of 12/31/06.If the acquisition is completed as of 12/31/06, what will the reported earnings per share be for the year ended 12/31/06 assuming pooling- of-interest accounting is used? (Points : 2) $2.00$2.33$2.50$2.80

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