Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

FGV Plantation Bhd plans to merge with TH Plantation Bhd. Based on the agreement, the exchange ratio will be based on earnings per share. The

FGV Plantation Bhd plans to merge with TH Plantation Bhd. Based on the agreement, the exchange ratio will be based on earnings per share. The balance sheets of both companies as per below:

FGV Plantation Bhd (RM000)

TH Plantation Bhd (RM000)

Current Assets

2,200

1,800

Fixed Assets

3,000

2,000

5,200

3,800

Current Liabilities

500

600

Long term liabilities

400

500

Common Stocks

1,500

700

Premium

700

400

Retained earnings

800

500

3,900

2,700

Additional information:

FGV Plantation Bhd (RM000)

TH Plantation Bhd (RM000)

Par value

RM5

RM 4

Price earnings ratio

6 times

3 times

Market per share

RM 24

RM 9

i) Calculate the earnings per share for both companies

ii) Calculate the new number of shares outstanding (NOSO) for target company

iii) Calculate the value common stock for target company

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Routledge International Handbook Of Financialization

Authors: Philip Mader, Daniel Mertens, Natascha Van Der Zwan

1st Edition

1138308218, 978-1138308213

More Books

Students also viewed these Finance questions