XYZ Ltd. is considering merger with ABC Ltd. XYZ Ltd.'s shares are currently traded at N$25. It has 200000 shares outstanding and its profits after taxes (PAT) amount to N\$ 400000 . ABC Ltd. Has 100000 shares outstanding. Its current market price is N$12.50 and its PAT are N$100000. The merger will be effected by means of a share swap (exchange). ABC Ltd. has agreed to a plan under which XYZ Ltd. will offer the current market value of ABC Ltd.'s shares. Required: (i) What is the pre-merger earnings per share (EPS) and P/E ratios of both the companies? (10 marks) (ii) If ABC Ltd.'s P/E ratio is 8 , what is its current market price? What is the exchange ratio? What will XYZ Ltd.'s post-merger EPS be? (6 marks) (iii) What must the exchange ratio be for XYZ Ltd.'s that pre and post-merger EPS to be the same? (4 marks)