Question 4 36 minutes 20 marks migh-Tech Corporation is considering merging with Low-Tech Limited, which is in a related line of business. LOW-Tech Limited, is an all-equity-financed firm that has had declining sales over the past few year but remains a profitable business with a huge presence in the industry market. The following information relates to the two businesses: Earnings per share Net asset value per share Market price per share Number of shares High-Tech Corporation 579.77c 1 704.39c 4 800c 11 693 000 Low-Tech Limited 20.70C 2160 155c 185 020 279 MARKS 6 REQUIRED: 4.1 What is the exchange ratio if it is based on current market prices? 4.2 Calculate the new EPS if the merger was successful. Determine whether the shareholders of Low-Tech Limited would be better off with or without the merger. 4.4 Discuss any four reasons why businesses may be interested in merging? TOTAL MARKS 4.3 I 4 00 20