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Hi,
In the free notes on page 53 and 54 there is a line in the illustration question that states:
“In addition, on 31 December, 2012 Viagem will pay the shareholders of Greca $1.76 per share acquired”In the solution, the consideration for the acquisition is given as 6,000+33,000+14,400.
The first two figures are based on the shares that V has given to G, yet the deferred cash payment is based on the shares that V acquired from G, 9,000 shares.Shouldn’t V be paying G based on the shares that G owns of V, i.e. 6,000 shares?
Thanks in advance,
Tom.Tom, this is what you have posted … “… Viagem will pay the shareholders of Greca $1.76 per share acquired”
Greca doesn’t own a single share in Viagem
In fact, it would be against the law for Greca to own any shares in Viagem
Who do you think received those Viagem shares when Viagem bought the 9,000 shares in Greca?
Who do you think is going to receive the $1.76 when Viagem pays out the money n one year’s time?
Think, carefully. And then let me know the decision that you have arrived at
The original shareholders of Greca?
So this isn’t a dividend as I was somehow thinking initially?Sorry if it was a simple question, just couldn’t seem to get my head around it so to speak.
Thank you for your help as always!
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