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I am referring to the BPP revision kit. It is mentioned (in part c) that if a 30% premium is offered, then Nuvola’s equity holders will expect $144m premium, and therefore the cash paid will be $44.
And if a 50% premium is offered, then Nuvola’s equity holders will expect $240m premium, and therefore the cash paid will be $140.
I had an issue with where the cash amounts ($44 and $140) are coming from.
For Question Cocoa Mocha Chai, Specimen Exam September 2018, to get the closing futures price, they added the unexpired basis to the 6 month future. But in Lirio March/Jun 16, they have minused the unexpired basis, even though for both questions the future is higher than the spot. The same should’ve been done for both. Why is that?
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