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What would be the post-merger share price of xylon

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Reference no: EM132885412

The following table shows pre-merger data for Kiya Company and Xylon, Inc.

                                                         Kiya                     Xylon

No of share outstanding           1,000,000           5,000,000

EPS                                         $2.50                 $4.00

Price per share                              $20.00               $50

Problem a) Assume Xylon is taking over Kiya by issuing one of its shares for two shares of Kiya. If there is no synergy, what would be the post-merger share price of Xylon?

Problem b) Assume there is synergy value of $2,600,000 created from the merger. What would be the post-merger price per share of Xylon? What would be the NPV of the merger?

Reference no: EM132885412

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