(b) Pixter Berhad is acquiring Picky Berhad. The available information about the companies are as follows: Pixter Berhad Picky Berhad Common Stock (Par value RM0.50) RM100,000 RM50,000 Earnings After Tax RM250.000 RM150,000 Dividend paid to Preferred Shareholders RM50.000 RM20,000 Price Earnings Ratio 18 times 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 (5 marks)