Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mighty soft Ltd. plans to acquire Techwire Ltd by offering its shares as compensation to the shareholders of Techwire Ltd... The Following information is provided:

Mighty soft Ltd. plans to acquire Techwire Ltd by offering its shares as compensation to the shareholders of Techwire Ltd... The Following information is provided:

For the FY 18-19 (ending 31st March)

Techwire Limited

Mighty soft Limited

Profit after tax (Rs. million)

16,155

25,241

Equity Shares Outstanding (million shares)

218

191

P/E ratio

18

14.6

Shareholders Equity (Rs. Million)

63,502

75,866

Required:

i) Determine the number of equity shares to be issued by Mighty soft for the acquisition of Techwire using the Share Exchange Ratio based on

a) MPS v b) EPS c) Book Value

ii) What is the EPS of Techwire Ltd. after the acquisition under the above share exchange plans if no synergies are expected?

iii) If Mighty soft decides to offer 20% premium to Techwire and the payment is done in 50% cash and 50% stock, what will be EPS of Mighty soft if no synergies are expected.

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_2

Step: 3

blur-text-image_3

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

Financial Intelligence For HR Professionals

Authors: Karen Berman, Joe Knight, John Case

1st Edition

1422119130, 978-1422119136

More Books

Students also viewed these Finance questions

Question

Technology. Refer to Case

Answered: 1 week ago