Q1) Differentiate Merger from Acquisition.

A sort of corporate methodology where two org

another organization is known as Merger. A corp
organization buys another organization and deal
 
In the merger, the two organizations break up to
the securing, the two organizations don't lose th
 
Two organizations of a similar sort and size go fo
which the bigger organization overwhelms the li
 
In a merger, the base number of organizations in
procurement, the base number of organizations
 
The merger is done deliberately by the organizati
either wilfully or automatically.
 
In a merger, there are progressively lawful conve
securing.
e methodology where two organizations amalgamate to shape
on is known as Merger. A corporate methodology, where one
another organization and deal with it, is known as Acquisition.

two organizations break up to frame another endeavour though, in

wo organizations don't lose their reality.

of a similar sort and size go for the merger. In contrast to securing, in

rganization overwhelms the littler organization.

ase number of organizations included are three, yet in the

base number of organizations included is 2.

e deliberately by the organizations while the procurement is done

utomatically.

are progressively lawful conventions when contrasted with the

Q2) What is the synergy of the merger.

The estimation of a joined firm is more noteworthy than the estimation of total of individual firms

1+1>2

It is the abundance if the blended an incentive over the total of individual firms

It is the capacity of a business blend to be more gainful than the entirety of the benefits of individua

Procuring organizations see target firm for cooperative energy esteem

On the off chance that two organizations can converge to make more prominent productivity or sca

The normal collaboration accomplished through a merger can be ascribed to different variables, for
on of total of individual firms

dual firms

ety of the benefits of individual firms

prominent productivity or scale, the outcome is what is in some cases alluded to as a collaboration consolidate

ibed to different variables, for example, expanded incomes, joined ability and innovation or cost redution
 Q3) What are different types of a merger, explain.

A merger is the combination of two or more business entities

There are three types of mergers
vertical merger
An organization converges with its providers upstream or wholesalers downstream. The thought proces
store network and to guarantee better item and better quality help

horizontal merger
Two organizations of a similar market consolidate as a rule to accomplish better market position and app

conoglomerate merger
Two organizations from irrelevant organizations consolidate which is ordinarily determined by the thoug
wnstream. The thought process behind this kind of merger is typically to improve the productivity of the whole business

better market position and appreciate the collaboration impact in term of cost and efficiency

narily determined by the thought process to acquire more noteworthy expansion benifts
e business
Q4) What is the difference between Capital market and Money market.

Money market
Money market is part of the financial system where lending and borrowing take place for
of up to one year.
Money market usually deals with promissory notes, exchange bills, commercial papers, T b
Money market includes investment institutions, central banks, commercial banks, finance
Money markets are liquid
The maturity of financial instruments is usually up to 1 year, while the market is competiti
Risk involved is small
The money market meets the company's short-term
funding needs and these boost the supply of funds in the economy

capital market
Capital market is part of the financial system where lending and investing takes pla
Capital market deals with equity, debentures, debt, preferred shares etc.
Stock markets include investment brokers, mutual funds, underwriters, private inv
Securities markets are more structured
Financial markets are comparatively less liquid
The maturity of capital markets instruments is longer and they do not have a stipu
ney market.

and borrowing take place for a brief period

ge bills, commercial papers, T bills, etc.
ks, commercial banks, finance companies, chit funds Financial markets are structured

while the market is competitive and the maturity is less than 1 year.

onomy

nding and investing takes place in the short to long term

ferred shares etc.
ds, underwriters, private investors, commercial banks, stock exchanges, insurance firms

nd they do not have a stipulated timeframe

 FV 1000
Coupon rate 12%
Maturity 6
Current price 1100
Q5) The following is available for bond: Marks: 8
a) What is the duration of a bond
b) Calculate YTM.
YR CF PV Factors W(PV@8%)
1 120 0.925925926 111.1111111
2 120 0.85733882 102.8806584
3 120 0.793832241 95.25986892
4 120 0.735029853 88.20358234
5 120 0.680583197 81.66998364
6 1120 0.630169627 705.7899821
1184.915187

Duration

Duration is a measure of the price sensitivity ofa bond or other debt instrument against a rate
change.The duration of a bond is easily confused with itsmaturity term or period, since both a
expressed in years.However, a term for a bond is a linear calculation of the years before
theprincipal is due to be repaid; it does not adjust with the interest rate setting.Duration, on th
other hand, is non-linear,and decreases as time increases to maturity.
 YTM 10%

WX(W*YR)
111.1111111
205.7613169
285.7796068
352.8143293
408.3499182
4234.739893
5598.556175

4.724858149

ebt instrument against a rate

y term or period, since both are
tion of the years before
est rate setting.Duration, on the
urity.
 A Ltd B Ltd
No of Equity shares 150000 150000
Market Price 300 60
PE Ratio 10 4
EPS 30 15
Ke 10%% 20%

Swap Ratio 0.2 1:5

Bases on Market price NO OF SHARES TO ISSUE 30,000.00

EPS EPS OF ACQ COM 30

EPS OF TAR COM 15

SWAP RATIO 0.5 1:2

NO OF SHARES TO ISSUE 75,000.00

Average 52,500.00 Final Share count

Total Shares of A ltd 202,500.00

Post merger Earnings of
ACQ company 4,500,000.00
Post merger Earnings of
Target company 2,250,000.00

Total Earnings 6,750,000.00

Post Merger EPS 33.3333333333

Post Merger Market Price 333.333333333