V SA 1. in Ajay ne exchange ratio acceptable to it if the discoühitátė iš 12 percent? 34.8 Maximum and Minimum Exchange

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V Sa 1 In Ajay Ne Exchange Ratio Acceptable To It If The Discouhitate Is 12 Percent 34 8 Maximum And Minimum Exchange 1 (882.1 KiB) Viewed 39 times

V SA 1. in Ajay ne exchange ratio acceptable to it if the discoühitátė iš 12 percent? 34.8 Maximum and Minimum Exchange Ratió' Vijay Limited andr Ajay Limited are discussing a merger deal in which Vijay will acquire Ajay. The information about the firms is given as follows: Vijay Total éarnings, E 36 mln 12 mln Number of outstanding shares 12 min 8 mln Earnings per share, EPS ₹3 ₹1.5 W Price-earnings ratio, PE 10 6 Market price per share, P ₹30 ₹9 (a) What is the maximum exchange ratio acceptable to the shareholders of Vijay Limited if the PE ratio of the combined firm is 8? (b) What is the minimum exchange ratio acceptable to the shareholders of Ajay Limited if the PE ratio of the combined firm is 9? (c) At what point do the lines ER and ER. intorcast