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n the recent Acquisition of A Bank and Building Society Limited, the following Information is available DETAILS ECHO BANK BUILDING SOCIETY Earnings   Sh.40.000,000 Sh.10,000,000 Number of shares     10,000.000         4,000,000 Earnings per share    Sh. 4         Sh.2.50 Price per share   Sh. 60        Sh.30    the Building Society agreed to the market exchange ratio of 0.667 At what price did the Bank offer to purchase shares of the BS?  How many additional shares did the Bank Issue in this transaction What was the effect of these additional shares on Earnings Per share of the Bank?

n the recent Acquisition of A Bank and Building Society Limited, the following Information is available DETAILS ECHO BANK BUILDING SOCIETY Earnings   Sh.40.000,000 Sh.10,000,000 Number of shares     10,000.000         4,000,000 Earnings per share    Sh. 4         Sh.2.50 Price per share   Sh. 60        Sh.30    the Building Society agreed to the market exchange ratio of 0.667 At what price did the Bank offer to purchase shares of the BS?  How many additional shares did the Bank Issue in this transaction What was the effect of these additional shares on Earnings Per share of the Bank?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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In the recent Acquisition of A Bank and Building Society Limited, the following Information is available

DETAILS

ECHO BANK

BUILDING SOCIETY

Earnings

 

Sh.40.000,000

Sh.10,000,000

Number of shares

 

  10,000.000

        4,000,000

Earnings per share

 

 Sh. 4

        Sh.2.50

Price per share

 

Sh. 60

       Sh.30

  

the Building Society agreed to the market exchange ratio of 0.667

  1. At what price did the Bank offer to purchase shares of the BS? 
  2. How many additional shares did the Bank Issue in this transaction
  3. What was the effect of these additional shares on Earnings Per share of the Bank? 
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