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Huge Limited and Tint Limited are companies operating in the same line of business. In the past few years huge limited has experienced competition from
Huge Limited and Tint Limited are companies operating in the same line of business. In the past few years huge limited has experienced competition from Tiny Limited to an extent that huge limited is now contemplating acquiring Tiny limited to consolidate its market share. The following financial data is available for the two companies: Required: i) Maximum exchange ratio Huge Limited should agree to if it expects no dilution in its EPS. (3 marks) ii) The earnings per share of Tiny Limited after the merger. ( 3 marks) iii) The post-merger market per share of Tiny Limited. ( 2 marks) iv) Given that the growth rate of Huge Limited is 7% while that of Tiny Limited is 12% compute the combined growth rate of the two companies. ( 2 marks)
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