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1. In part (b), in method 2, answer shows
((3.644 x 3 – 4.5 x 2) / 2 ) / 4.5 x 100 to get 21.5%
Why do we divide by 2 ?
Is it because to separate the amount between Sigra Co and Dentro Co ?
2. We will use Sigra Co share price to calculate new share price of Dentra Co
However answer seems that they have multiplied 3 and divide 2 of share price of combined company NOT SHARE PRICE OF SIGRA CO
I do not get why they have x 3/2 based on combined entity
I was not able to spot a single question in kaplan textbook regarding this matter.
1. It is taking the value of 3 new shares less 2 old share – this gives the profit on 2 old shares, so divide by 2 to get the gain on 1 share.
2. Because they end up with 3 share for every 2 shares that they held before.
I cannot comment on the Kaplan textbook because I have not seen it, but things like this are common in the exam.
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