Question 4 a. "A proposed merger will take advantage of available economies of scale". Discuss briefly with TWO (2) points what does it mean with the statement. (6 Marks) b. Consider the following pre-merger information about Belinjau Berhad and Lengkuas Berhad: Belinjau Lengkuas Berhad Berhad Shares outstanding 300,000 150,000 Price per share RM13.80 RM6.00 Belinjau Berhad is considering acquiring Lengkuas Berhad as part of the firm's competitive strategy Belinjau Berhad is evaluating two possible options either to pay RM5.50 in cash for every share of Lengkuas Berhad or to offer 40% of its stock. Both firms are 100% equity-financed Belinjau Berhad estimates that the incremental benefits from this exercise to be worth RM450,000 From the above information you are required to answer the following questions. Compute the value of Lengkuas Berhad to Belinjau Berhad (3 Marks) Analyzn which acquisition option should Belinjau Berhad choose (6 Marks) (Total: 15 Marks) Question 4 a. "A proposed merger will take advantage of available economies of scale". Discuss briefly with TWO (2) points what does it mean with the statement. (6 Marks) b. Consider the following pre-merger information about Belinjau Berhad and Lengkuas Berhad: Belinjau Lengkuas Berhad Berhad Shares outstanding 300,000 150,000 Price per share RM13.80 RM6.00 Belinjau Berhad is considering acquiring Lengkuas Berhad as part of the firm's competitive strategy Belinjau Berhad is evaluating two possible options either to pay RM5.50 in cash for every share of Lengkuas Berhad or to offer 40% of its stock. Both firms are 100% equity-financed Belinjau Berhad estimates that the incremental benefits from this exercise to be worth RM450,000 From the above information you are required to answer the following questions. Compute the value of Lengkuas Berhad to Belinjau Berhad (3 Marks) Analyzn which acquisition option should Belinjau Berhad choose (6 Marks) (Total: 15 Marks)