banner_ad

Pl. help me on Mergers and acquisition Of MAFA

This query is : Resolved 
Profile Image

Profile Image

(Querist)
06 March 2008 Suppose EPS of A and B are Rs 2 and Rs 3 respectively. A wants to acquire B. Swap ratio-.5:1(1 sh of A for every 2 sh of B)
So wht. will be the equivalent EPS of B after merger. sh.cap. of A and B is 20000 and 30000 respectively.

I have solved in the foll. way.

shareholder of B earns rs3 for 1 share
so they will be earning Rs 6 for 2 shares.

therefore their equivalent EPS will be 6 in the post-merger .

One book has solved this in the foll. way.
Earings of A-40000 and B-90000
shares issued by A-15000.
total no. of shares of merged entity-35000
EPS of merged entity-130000/35000=3.7143
So equivalent EPS of B-3.7143X.5=1.8572
Now pl. tell me which approach is correct.
Profile Image

S.Srinivasaraghavan

Profile Image

S.Srinivasaraghavan (Expert)
06 March 2008 After merger there will be only one company, so where is the question of two EPS?
Profile Image

CA Saurabh Maheshwari

Profile Image

CA Saurabh Maheshwari (Expert)
07 March 2008 THE SOLUTION OF BOOK IS CORRECT
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now


CCI Pro
Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!


Similar Resolved Queries


loading


Unanswered Queries


banner

Trending Online Classes

view all classess

CCI Pro
Meet our CAclubindia PRO Members
Subscribe Now

Follow us
add to google news



Answer Query



Quick Links



Browse by Category




Latest Job Openings

View all
Company
14 May 2026
Senior Accounts Executive

Karan Gupta & Co.

New Delhi

Graduate (Any)

View Details
Company
ARTICLESHIP 23 May 2026
Article Assistants

Acupro Consulting

Gurgaon

CA Inter

View Details
Company
11 May 2026
Post office

Post office

Anakapalle

Others

View Details
Company
11 May 2026
AUDIT INTERN

M/S K.K.KHANNA AND COMPANY

Noida

CA Foundation

View Details
Company
ARTICLESHIP 15 May 2026
ARTICLE ASSISTANT, TRAINEE AND PAID ASSISTANT

YOGESH KAPOOR AND ASSOCIATES

New Delhi

B.Com

View Details
Company
06 May 2026
Account Assistant / Article Clerk

V.K. Ranjan & Co(Chartered Accountants)

New Delhi

B.Com

View Details
Company
26 April 2026
Chartered Accountant

Source HR

Mumbai

CA

View Details
Company
16 May 2026
Account & Audit Asst

RAHUL KHANDEBHARAD & ASSOCIATES

Nashik

B.Com

View Details