Question: need 100% correct 2017 - June [8] (b) R. Ltd. is intending to acquire S Ltd. (by merger) and the following information are available in

need 100% correct 2017 - June [8] (b) R. Ltd. is

need 100% correct

2017 - June [8] (b) R. Ltd. is intending to acquire S Ltd. (by merger) and the following information are available in respect of both the companies: Particulars R Ltd. S Ltd. Total Current Earnings (*) 2,50,000 90,000 No. of Outstanding Shares 50,000 30,000 Market Price per Share (5) 21 14 (i) What is the present EPS of both the companies? (ii) If the proposed merger takes place, what would be the new earnings per share for R Ltd. (assuming the merger takes place by exchange of Equity Shares and the Exchange Ratio is based on the Current Market Pricel? Assume no synergy impact. (10 marks)

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