Dexter Berhad is acquiring Dusty Berhad. The available information about the companies are as follows:   Dexter Berhad                                                          Dusty Berhad Common Stock (Par value RM0.50) RM100,000 RM50,000 Earnings After Tax RM250.000 RM150,000 Dividend paid to Preferred Shareholders RM50.000 RM20,000 Price Earnings Ratio 18 times 9 times Compute the followings: i) Pre-merger earnings per share for both companies. ii) Share exchange ratio for this merger based on market price iii) Post-merger earning per share

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
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Chapter18: Corporations: Organization And Capital Structure
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Dexter Berhad is acquiring Dusty Berhad. The available information about the
companies are as follows:
  Dexter Berhad                                                          Dusty Berhad
Common Stock (Par value RM0.50) RM100,000 RM50,000
Earnings After Tax RM250.000 RM150,000
Dividend paid to Preferred Shareholders RM50.000 RM20,000
Price Earnings Ratio 18 times 9 times
Compute the followings:
i) Pre-merger earnings per share for both companies.

ii) Share exchange ratio for this merger based on market price

iii) Post-merger earning per share

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