Life Studio Corp. (LSC) has $845 million in after-tax earnings and 200 million shares

outstanding each priced at $85. LSC is considering acquiring Box Design Limited (BDL). BDL

has $90 million in after-tax earnings and 50 million shares outstanding each priced at $35.

LSC believes that the acquisition will yield $5 million in immediate synergistic earnings. LSC

is planning to bid with an offer price that implies a 15% premium.

a)

Determine the offer price.

b)

Determine the exchange ratio.

c)

Determine EPS for the combined company.

d)

Determine the maximum offer price at which KMJ does not experience EPS dilution

after the acquisition