A Ltd. wants to acquire T Ltd. and has offered a swap ratio of 1 : 2. Following information is provided : A Ltd. T Ltd. Profit after Tax ₹18,00,000 ₹3,60,000 Equity Shares Outstanding 6,00,000 1,80,000 EPS ₹3 ₹2 PE Ratio

CS Professional · Valuations & Business Modelling · PYQS · December 2020
A Ltd. wants to acquire T Ltd. and has offered a swap ratio of 1 : 2. Following information is provided : A Ltd. T Ltd. Profit after Tax ₹18,00,000 ₹3,60,000 Equity Shares Outstanding 6,00,000 1,80,000 EPS ₹3 ₹2 PE Ratio 10 Times 7 Times MPS ₹30 ₹14 Calculate : (ii) EPS of A Ltd. after acquisition

Answer & Explanation:

(ii) EPS of A Ltd after acquisition Total Earnings 18,00,000 + 360,000 ₹21,60,000 No. of Shares 600,000 + 90,000 690,000 EPS 21,60,000 / 690,000 ₹3.13

Topics: Mergers & Acquisitions

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