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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Makonis co
Part b) the value gained by Makonis shareholder
Sir why cant it be the combined company equity value divided by 310 shares to estimate the value per share after acquisition and then multiplied by the 210 shares of makonis shareholders holding and then deduct the cash premium paid to estimate the percentage gain after acquisition similar to Kerrin co, cant seem to understand the difference between the two question.
Although you would have got credit for what you want to do, the amount of cash paid will reduce the combined company value and therefore the value per share.
So the combined company value -cash premium paid divided by 310 shares and so on……but would we deduct the cash premium after arriving at the new value like the earlier comment?