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BabaAli Limited ( B A ) is considering acquiring Centten Inc ( CT ) . It is expected that after the acquisition earning per share
BabaAli Limited is considering acquiring Centten Inc CT It is expected that after the
acquisition earning per share of the merged firm will be $ Below is some needed
information:
It is expected that synergies will increase total earnings and total value of the merged firm to
$ and $ respectively.
a Complete the above table.
b How many shares of BA are exchanged for each share of CT
c What is the cost of merger to BA
d What is the change in the total market value of those BA shares that were outstanding before
the merger? Explain the reason for the change.
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