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b. Kone Ltd is contemplating a complete share acquisition of Mwomu Ltd. Kone Ltd is offering three of its shares for every two shares of Mwomu Ltd. The data below relates to the two companies: Kone Ltd Mwomu Ltd Sh. Sh. Earnings to ordinary shareholders 5,190,360 2,340,000 Earnings per share (EPS) 14.80 29.25 Market Price per Share 222 322 The corporate tax rate is 30% Required: i. Determine the maximum offer price that will not dilute the EPS of Kone Ltd 2 marks ii. Compute the premium payable to the shareholders of Mwomu Ltd. 2 marks Given that the growth rate of Kone Ltd is 8% while that of Mwomu Ltd is 12%, compute the combined growth rate of the two companies. 2 marks b. Kone Ltd is contemplating a complete share acquisition of Mwomu Ltd. Kone Ltd is offering three of its shares for every two shares of Mwomu Ltd. The data below relates to the two companies: Kone Ltd Mwomu Ltd Sh. Sh. Earnings to ordinary shareholders 5,190,360 2,340,000 Earnings per share (EPS) 14.80 29.25 Market Price per Share 222 322 The corporate tax rate is 30% Required: i. Determine the maximum offer price that will not dilute the EPS of Kone Ltd 2 marks ii. Compute the premium payable to the shareholders of Mwomu Ltd. 2 marks Given that the growth rate of Kone Ltd is 8% while that of Mwomu Ltd is 12%, compute the combined growth rate of the two companies. 2 marks

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