Companies A Ltd. & B Ltd. are set to merge.
This merger is not likely to result in any gains.
A Ltd., which is the Buyer is to issue Shares to the Shareholders of B Ltd., only to the extent of ensuring that the combined Earnings per share is Rs.3.2
	A Ltd.	B Ltd.	Merged Entity
Market price per share Rs.	17.5	12	?
Number of Shares	60000	110000	?
Price Earnings Ratio	7	5	?
Total Earnings Rs.	?	?	?
Total Market Value Rs.	?	?	?
Earnings per share	2.5	3	3.2
		(Marks)
A. Fill up all the Blanks in the above table		10
B. What will be the cost of Acquistion for A Ltd .?		2
C. How many New shares are to be exchanged for the Total shares in B Ltd.?		2
D.Exchange Ratio?		2
E. Calculate the Change in the Market Value of A Ltd. shares in comparison to their Market Value before merger		4