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 : (v) Market Value of the merged firm.

Answer & Explanation:

(v) Market Value of Merged Firm Total Number of Shares : 690,000 Expected Market Price : 31.30 Total Value : 690,000 * 31.30 = ₹2,15,97,000

Topics: Mergers & Acquisitions

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