QUESTION 1 20 MARKS Kefuta Limited is considering a merger with Sky Limited. Kefuta Limited expects the merger to result in cost savings amounting to NS 3850000 per annum. Kefuta Limited's current EPS is N\$8.45 and its current dividend per share is NS 4.95. The growth rate in EPS and dividend per share over the last 10 years has been 10% per annum. Sky Limited's current EPS is N\$ 3.85 and its current dividend per share amounts to N\$2.75. Sky Limited has experienced a growth rate in EPS and dividend per share over the last six years of 5% per annum. This is expected to continue in the future. The current market price for Kefuta Limited is NS 83.25 per share and that of Sky Limited is NS 25.35 per share. Kefuta Limited has 8.5 million shares in issue while Sky Limited has 2.5 million shares