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Post-Acquisition Earnings Per Share Assignment | Homework For You

  1. Huge limited is contemplating a complete share acquisition of Tiny Ltd. Huge Ltd is offering three of its shares for every two shares of Tiny Ltd. The data relating to the two companies are shown below.Homework For You

Huge Ltd ($)

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Tiny Ltd ($)

Earnings to ordinary shareholders before tax

5,200,000

2,400,000

Earnings per share (EPS)

15

30

Market Price per share

200

300

The corporate tax rate is 30%.

Required

  1. Compute the post-acquisition EPS of the two companies
  2. Highlight the advantages of growth by acquisition
  3. What alternatives forms of payment are available in a bid. Get Finance homework help today

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