1. X Ltd intends to take over Y Ltd by offering two of its shares for every five shares in Y company Ltd. Relevant financial data is as follows:

	X Ltd	Y Ltd
EPS	$4	$4
Market price per share	$200	$80
Price earnings ratio	100	40
No. of shares	200,000	500,000
Total earnings	$400,000	$1,000,000
Total market value	$10,000,000	$10,000,000

Required:

1. Compute the combined EPS & MPS
2. Advice the management of X Ltd on whether to take over company Y