2 Companies X Ltd. & Y Lid. are set to merge. This merger is not likely to result in any gains. X Ltd., which is the Buyer is to issue Shares to the Shareholders of Y Lid., only to the extent of ensuring that the combined Earnings per share is Rs.5.2 X Ltd. Y Ltd. Merged Entity Market price per share Rs. 51 44 Number of Shares 70000 130000 Price Earnings Ratio 10 8 Total Earnings Rs. ? ? Total Market Value Rs. 7 Earnings per share 5.1 5.5 5.2 (Marks) A. Fill up all the Blanks in the above table 10 B. What will be the cost of Acquistion for X Ltd.? C. How many New shares are to be exchanged for the Total shares in Y Ltd.? N N D. Exchange Ratio? E. Calculate the Change in the Market Value of X Ltd. shares in comparison to their Market Value before merger 4