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Qns - 2 The following Information relates to the accruing company X ltd and Target Company Y Ltd X ltd . Y ltd . No
Qns The following Information relates to the accruing company X ltd and Target Company Y Ltd
X ltd Y ltd
No of Shares FV Rs each lakhs lakhs
Market Capitalization Rs lakhs lakhs
PE ratio Times
Reserve and Surplus Rs lakhs lakhs
Promoters holding no of Shares lakhs lakhs
The board of directors of both companies has decided to give a fair deal of the share holders accordingly for the swap ratio the weight are chosen as and respectively, for earnings, book value and market price of a share of each company you have been advised to do the following
Calculate the swap ratio and promoters holding percentage after acquisition.
What is the EPS of X LTD AFTER acquisition of Y ltd
What are the expected market price per share and market capitalization of X ltd after the acquisition assuming PE ratio of the Firm X ltd remain unchanged?
Calculate the free float market capitalization of the merged company.
Please state what type of beta you will use if Y ltd does not have any loan and you were asked to conduct a DCF based valuation of the shares Y ltd Provide two Primary Justification Behind your answers.
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