The directors of Nico Limited have appointed you as a merger and acquisition specialist. They are considering the acquisition of Maya Limited. You are to advise them whether or not to proceed with the project. The following information is available: Nico Limited Maya Limited Market price per share

The directors of Nico Limited have appointed you as a merger and acquisition specialist. They are considering the acquisition of Maya Limited. You are to advise them whether or not to proceed with the project. The following information is available: Nico Limited Maya Limited Market price per share

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter23: Corporate Restructuring

Section: Chapter Questions

Problem 7P

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World Enterprises is determined to acquire Intous Ltd through exchanging stocks. World Enterprises is offering R65 per share for Intous ltd. You are given the following information World Enterprises Intous Ltd Net Income R50 R10 Shares outstanding 5000 2000 Earnings per share R10 R5 Market price per share R150 Price earnings ratio R15 a. Calculate the number of shares to be issued by Intous Ltd: b. Calculate combined earnings per share of both World Enterprise and Intous Ltd c. Calculate price earnings ratio (P/E ratio) paid (Hint: use the R65 to calculate the P/E ratio) d. Compare the current and paid P / E ratios
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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 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?
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QUESTION 4 The directors of Pep Limited have appointed you as a merger and acquisition specialist. They are considering the acquisition of Guardiola Limited. You are to advise them whether or not to proceed with the project. The following information is available: - Pep Limited Guardiola Limited Market price per share R5.00 R4.00 Earnings per share R2.2 R1.8 No. of shares issued 3 000 000 2 000 000 - Cash payment of R7 million to Guardiola Limited - Synergy benefits of R3 million will accrue to the acquisition Required: Assume the acquisition is based on market values with a cash payment. 4.1 Calculate the combined value of the proposed acquisition. 4.2 Calculate the net present value of the proposal. 4.3 Calculate the acquisition premium. 4.4 Calculate the post-acquisition market price of the share. 4.5 Calculate the post-acquisition increase/decrease price of the share. 4.6 Identify and explain SIX (6) advantages associated with a Merger and Acquisition.
please need help assume as possible
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