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sir im having great trouble understanding this question, i have few issues
1. why are the synergy benefits assumed to accrue only in share for share exchange and not others while others are also forms of acquisition
2. could you explain me the workings for bond offer, basically what is happening in that part?
1. Synergy benefits will occur whichever way it is financed, but the benefits will show in Sigra’s share price.
Therefore when looking at the gain to Dentro’s shareholders, it will only be relevant if they end up with shares in Sigra.2. The value of a bond is always the present value of the future receipts discounted at the investors required rate of return. We know what the future receipts will be (interest and redemption in 3 years). To decide on the required rate of the return we use the IRR of the existing debt.
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