QUESTION THREE [25] Tiyano Ltd is considering making an offer to purchase Rolan Ltd. The following data is available. Tiyano Rolan Price-Earnings ratio 14 times 11 times Shares issued 200 000 80 000 Earnings (After Tax) 2 300 000 720 000 Dividends 620 000 330 000 NB: Tiyano believes the earnings and dividends of Rolan will grow at a constant rate of 6 % per annum and that synergies will result in a more superior growth rate of 7 % per annum. Required: 3.1 Calculate the value of Rolan to Tiyano. (Hint: You need to calculate Rolans Earnings Per Share, Price Per Share, Dividends Per Share, Required Return and Envisaged Return). (14) Page 4 of 4 3.2 Calculate Tiyanos gain (if any) from this acquisition. (3) 3.3 If Tiyano offers R145 in cash for each of Rolans shares, what is the Net Present Value of this acquisition? (3) 3.4 If Tiyano offers 10 000 shares in exchange for all Rolan shares, what would the Net Present Value be? (5)