On 3 October 207, BBC announced that it has entered into a scheme implementation deed with XYZ whereby BBC will acquire all of the issued securities of XYZ via a scheme of arrangement. Consideration: 0.6BBC shares for 1XYZ shares Use the following information to answer the questions below. Before merger announcement: The merger will result in revenue enhancing synergies. Based on your analysis, the earnings of the combined entity will be 15% higher than the sum of the earnings of the target and the acquirer as independent entities. A P/E ratio of 20 is believed to be appropriate for valuing the merged entity. E1. Determine the bidder's maximum exchange ratio and target's minimum exchange ratio. Does the current offer lead to a mutually beneficial deal? Show calculations and state any necessary assumptions