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Question 9 a) Company A has a present value of 78 million and Company B has a present value of 14 million. Merging the two
Question 9
a) Company A has a present value of 78 million and Company B has a present value of 14 million. Merging the two would enable cost savings with a present value of 5 million. Company A acquires 100% of shares in Company B for 18 million. What do Company Bs shareholders gain from this acquisition?
(3 marks)
b) Deepings Company has a P/E ratio of 9.6 and a share price of 1.52. What are the earnings per share of the company?
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