Sanju Limited is studying the possible acquisition of Manju Ltd. by way of merger. The following data is available: Particulars Sanju Ltd. Manju Ltd. Profits after Tax (PAT) ₹600 Lakh ₹1000 Lakh No. of equity shares 5,00

If the exchange ratio is based on market prices it is 350/210 that is, for every 5 shares of Manju Ltd., the target shareholders would receive 3 shares of Sanju Ltd. Hence, for 1,50,000 shares of Manju Ltd. they will receive (3/5) * 1,50,000 shares in Sanju Ltd., that is 90,000 shares. Particulars In ₹ Combined PAT (600 Lakh + 1000 Lakh) 1600 Lakhs No. of Equity Shares (5,00,000 + 90,000) 5,90,000 Revised EPS (1600 Lakhs / 5,90,000) 271.19 Hence, the new EPS of Sanju Ltd. is ₹271.19.