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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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