Question
A ltd is planning to acquire B ltd and C Ltd. The relevant financial data of the firms prior to merger are as follows. A
A ltd is planning to acquire B ltd and C Ltd. The relevant financial data of the firms prior to merger are as follows. A ltd B ltd C Ltd
Market price per share 60 37 46
No. of shares 45 million 18 million 8 million
Net profit 90 million 18 million 18 million
Calculate a. P/E ratio for each company b. If the market price is the exchange ratio then how many shares will be given by A Ltd to B and C Ltd. C. Will you recommend merger of either/both companies? Justify your answer
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
