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7. ABC Ltd and XYZ Ltd is proposing a friendly 100% stock merger. The key information is as follows: XYZ Ltd Share price 17.05 96

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7. ABC Ltd and XYZ Ltd is proposing a friendly 100% stock merger. The key information is as follows: XYZ Ltd Share price 17.05 96 Shares outstanding (m) Net income (m) 134.0 ABC Ltd Share price 33.90 Current shares outstanding Net income (m) Exchange ratio 284 357.1 0.63 ABC share for 1 XYZ share Without any further information, is this deal EPS accretive or dilutive for ABC? (2-4 marks)

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