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(b) Dexter Berhad is acquiring Dusty Berhad. The available information about the companies are as follows: Dexter Berhad Common Stock (Par value RM0.50) RM100,000 Earnings
(b) Dexter Berhad is acquiring Dusty Berhad. The available information about the companies are as follows: Dexter Berhad Common Stock (Par value RM0.50) RM100,000 Earnings After Tax RM250.000 Dividend paid to Preferred Shareholders RM50.000 Price Earnings Ratio 18 times Dusty Berhad RM50,000 RM150,000 RM20,000 9 times Compute the followings: i) Pre-merger earnings per share for both companies. (5 marks) ii) Share exchange ratio for this merger based on market price (5 marks) iii) Post- merger earning per share
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