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Both question has a share for share exchange option for aquisition. When calculating the percentage gain to subsidiary investors, why 2013 question use the parent company share price while 2012 qustion use the combined company share price?
Thank youIt is a bit confusing, I appreciate.
The reason is really that in the 2012 question it is the parent looking at how much to pay, and they are in a position to estimate what the combined company will be worth.
In the 2013 question, it is more a question of how the subsidiary shareholders will react, and they are more likely to look at the existing share price, because they will not be in a position to estimate the combined value.
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