Company Alpha ltd has a market value of N$6 billion and an issued share capital of...

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Company Alpha ltd has a market value of N$6 billion and anissued share capital of 60 million shares. Company Beta ltd, acompany in the same industry as Company Alpha, has an issued sharecapital of 20 million shares and a market value of N$1 billion.Company Alpha wishes to take over company Beta, and believes thatthe combined company value will be N$8 billion. Company Beta hasagreed to a takeover value of N$1, 5 billion.
Required:
Discuss the effect (s) the takeover of company Beta will have onthe existing shareholders of company Alpha, if company Beta isacquired by:
a) An issue of new shares to existing shareholders;
b) An issue of shares to new shareholders;
c) Borrowing; or
d) A share exchange.

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The effects of takeover of company Beta by Alpha by various options is as follows a An issue of new shares to existing shareholders of Beta ltd from Alpha ltd will lead to following impact Particulars Alpha ltd Beta ltd Market Value a 6000000000 1000000000 No of shares b See Answer

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Company Alpha ltd has a market value of N$6 billion and anissued share capital of 60 million shares. Company Beta ltd, acompany in the same industry as Company Alpha, has an issued sharecapital of 20 million shares and a market value of N$1 billion.Company Alpha wishes to take over company Beta, and believes thatthe combined company value will be N$8 billion. Company Beta hasagreed to a takeover value of N$1, 5 billion.Required:Discuss the effect (s) the takeover of company Beta will have onthe existing shareholders of company Alpha, if company Beta isacquired by:a) An issue of new shares to existing shareholders; b) An issue of shares to new shareholders; c) Borrowing; or d) A share exchange.