Sir in this question examiner didn't take redundancy cost into account when calculating Post acquisition earning per share
But what i did was,
1st calculated tax rate as follow ($1.89m/$6.30m * 100)= 30%
2nd Net cost of redundancy = $1m - ($1m*30%)
= $1m - $0.30m (tax saving due to redundancy cost)
= $0.70,m
Now i have taken this into calculation of profit of combined company and calculated the Post acquisition earning per share. This gave me EPS of 0.1222
What i want to know is that, Whether what i did was right or not???
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Doubler Inc (June 07)
7y ago#1That is fine (and the examiner notes this possibility in his answer even though he didn't do the actual calculation).
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