KT plc is considering bidding for CT ltd a telecom company whose details are as follows;

CT ltd$.\text{'}$s share capital is K$150$ million made up of K $0\mathrm{.}75$ ordinary shares. The most recent profit after tax is K $20$ m $.$ The current dividend pay$-$out ratio is $60\%.$ The dividend growth rate is projected to be constant at $4\%$ per year for a foreseeable future. The shareholders in CT ltd requires a $10\%$ return on their investment.

KT plc$,$ the bidder has a price earnings ratio of $11$ times. The directors in KT plc prefers to use the $\frac{P}{E}$ ratio or the dividend growth model as methods of estimating the value attached to the target company.

REOUIRED:

a$)$ Calculate the EPS and the amount payable per share in CT Itd using KTs price earnings ratio. $[5$ Marks$]$

b$)$ Determine the share price in CT using the dividend valuation model.

$[5$ marks$]$

c$)$ Briefly explain the difference between a merger and an acquisition and clearly differentiate the different types $($forms$)$ of acquisitions.

$[10$ marks$]$