Company A with 10 lakh outstanding shares of Rs 40 each acquires Company B which has 5 lakh outstanding shares of Rs 20 each. The latter will be ready for acquisition only when it gains at least Rs 25 lakh from this move. Find how much Company A should pay per share to Company B.
Payment per share = (Share value of target company + gain)/No. of shares
= (5,00,000 shares × Rs 20 + Rs 25,00,000)/5,00,000 shares
= Rs 25 per share