Highlands Ltd. currently has an earnings per share (EPS) of US 2.00 but is determined to report

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Question:

Highlands Ltd. currently has an earnings per share (EPS) of US 2.00 but is determined to report an EPS of US 2.67 and therefore acquires Olympia Ltd. The relevant acquisition information is provided below:

Highlands Ltd.	Olympia Ltd.
Earnings per share (EPS)	Sh. 2.00	Sh. 2.50
Market price per share (MPS)	Sh. 40	Sh. 25
Price to earnings (P/E) ratio	20	10
Number of shares	100,000	200,000
Total earnings	Sh. 200,000	Sh. 500,000
Total market value	Sh. 4,000,000	Sh. 5,000,000

Required:

Compute the cost of the merger to Highlands Ltd.

Posted Date: Nov 09, 2021 04:00 AM

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Highlands Ltd. currently has an earnings per share (EPS) of US 2.00 but is determined to report

Question:

Expert Answer:

ANS WER The cost of the merger to Highlands Ltd is Sh 9 000 000 COM PUT ATION ... View the full answer

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