QUESTION 3 a) Relevant financial data for Urban Trend Co. is as follows: Total Assets Current liabilities Long-term debt (10 percent) Common stock (RM0.50) Paid-in-capital Retained earnings Corporate tax rate Market price per share Earnings per share RM500,000 RM100,000 RM100,000 RM100,000 RM100,000 RM100,000 28 percent RM2.00 RM0.12 Urband Trend is planning to acquire Elavana Co. with a premium of RM0.35 per share in an attempt to increase the market share in industries. The expected synergy Hak Cipta Universiti Teknologi MARA 10 for this acquisition is RM60,000. Meanwhile, the financial data for Elavana Co. are as follows: Common shares outstanding Market price per share Earnings per share 40. 000 units RM2.00 RM0.20 i) Calculate cost of merger for this acquisition. (5 marks) ii) If company opt for stock acquisition, determine post-merger earnings per share. (6 marks) i) Calculate the post-merger price per share based on cash and stock basis of acquisition and identify which acquisition should the company choose. (9 marks) (Total : 100 marks)