Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › 2015SD Q1 vs 2020Mar Q1: total value attributable to acquiree company
- This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.
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- June 5, 2021 at 8:13 pm #623331
Dear tutor:
in 2015 Q1, total value to acquiree company= MV equity + MV debt + premium
in 2020 Q1, total value to acquiree company= MV debt + premiumwhy MV equity omitted in 2020Mar Q1? should it include in? but if it includes MV equity, the value attributable to acquirer would be negative.
thanks
June 6, 2021 at 8:52 am #623373I do not understand what you mean because the MV of equity has not been omitted.
Which part of the answer are you referring to?
June 6, 2021 at 11:34 am #623409in 2020, value attributable to M investors=14375+6500, premium +MV debt,
in 2015, value attributable to A investors=2100+9000+7350, MV equity+ MV debt+ premium,two questions have the similar logic, unbundle part of business, calculate PV after unbundling+ value of sell-off (+PV synergies in 2020) – value to acquiree company.
June 6, 2021 at 4:42 pm #623474In the 2020 question, 14,375 is not the premium!!
It is the current market value of the equity ($12,500) plus the premium of 15%.
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