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From the model answer, Appendice 1 calculate the value of combined co. The part on calculating value added from acquiring Fugae. Why can’t I use 13374m – 1666.7m to derive at the maximum price Avem will pay for Fugae acquisition. Is it compulsory to deduct the MARKET CAPITALISATION? (ie 12000)
From my understanding, the FCFE of 1666.7 is also value of equity of Avem, so why can’t it be used instead of MARKET CAPITALISATION?
Please help me clarify this. Thanks so much.
You can find my lecture working through the whole of this question linked from the following page:
https://opentuition.com/acca/afm/afm-revision-lectures/I explain your point in the lecture 🙂
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