a) Calculate the maximum exchange ratios Maxi ltd should agree if it expects no dilution in the Earnings Per Share. b) How much premium would the shareholders of Mini Ltd
a) Calculate the maximum exchange ratios Maxi ltd should agree if it expects no dilution in the Earnings Per Share. b) How much premium would the shareholders of Mini Ltd
Chapter23: Corporate Restructuring
Section: Chapter Questions
Problem 7P
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Maxi ltd is considering acquiring mini ltd. Selected financial data for the two companies are as follows: Max ltd Mini Ltd Annual sales sh. Million 750 90 Net income sh. Millions 60 7.5 Ordinary shares outstanding (millions) 15 3 Earnings per share (EPS) sh 4 2.5 Market price per share (sh) 44 20 Required: a) Calculate the maximum exchange ratios Maxi ltd should agree if it expects no dilution in the Earnings Per Share. b) How much premium would the shareholders of Mini Ltd
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