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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Doric
I am seeking a clarification on the statement that the purchase of the current equity at a premium of 20%.
What I did was 0.40+1.20 = .48 but the answer had it as .60
Please explain
The finance raised from the management buy-out will pay for any remaining liabilities, the additional capital investment required to continue operations and re-purchase the shares at a premium of 20%.
original par value .40
Please tell me which P4 exam to help me find it 🙂
(I can’t remember the name of every question in every exam there has been 🙂 )
It’s Dec 2010…
Pls help sir, i am facing the same problem…
Thanks…
There is no way that the sellers would accept 48c when the current market value is 50c !!!!
The premium must be on the current share price, so 0.50 + 20% = 0.60.