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(3 pts) Under the proposed exchange ratio (0.9434), Exhibit 16 shows that the merger will be slightly dilutive for legacy BNY shareholders and accretive for

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(3 pts) Under the proposed exchange ratio (0.9434), Exhibit 16 shows that the merger will be slightly dilutive for legacy BNY shareholders and accretive for MEL shareholders, before taking synergies into account. Explain how these numbers are calculated from the standalone forecasts of BNY and MEL EPS. Specifically: show why the estimated EPS to BNY and MEL shareholders in 2007 Q3 is 0.58 and 0.61, respectively (under no synergies, exchange ratio 1:0.0934)

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