XYZ cat food manufacturers is in the process of negotiating the acquisition of ABC cat food...

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XYZ cat food manufacturers is in the process of negotiating the acquisition of ABC cat food manufacturers. The management estimates that the acquisition will result in economies of scale and the additional benefits will amount to R6 million. The following information is available for the two companies: Earnings per share (R) Dividend per share (R) Growth rate (%) Market price per share (R) XYZ cat food manufacturers 1.45 1.15 7 18.00 No. of shares issued (millions) Calculate the exchange ratio based on market values. 5 ABC cat food manufacturers 0.75 0.35 3 11.00 2 XYZ cat food manufacturers is in the process of negotiating the acquisition of ABC cat food manufacturers. The management estimates that the acquisition will result in economies of scale and the additional benefits will amount to R6 million. The following information is available for the two companies: Earnings per share (R) Dividend per share (R) Growth rate (%) Market price per share (R) XYZ cat food manufacturers 1.45 1.15 7 18.00 No. of shares issued (millions) Calculate the exchange ratio based on market values. 5 ABC cat food manufacturers 0.75 0.35 3 11.00 2

Answer rating: 100% (QA)

Answer i To calculate the postacquisition earnings per share EPS we need to consider the earnings ... View the full answer