Question
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. |
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