Additional question 1 Progressive Ltd is determined to increase its earnings per share from $I to $1.33, so it acquires Lo-Gear. The following facts are provided: Item Earnings per share (S) Price per share (S) Price-earnings ratio Progressive Lo-Gear Merged company 1.00 20.00 20.00 100 000 100 000 2 000000 1.25 12.50 10.00 200 000 250 000 2 500 000 1.33 Number of shares Total earnings (S) Total market value (S) There are no economic benefits from combining the two companies. In exchange for Lo- Gear's shares, Progressive issues just enough of its own shares to ensure its S1.33 eamings- per-share objective. (a) Complete the table for the merged company. (b) How many shares of Progressive are exchanged for each share of Lo-Gear