[ryanking1407]

The notes state that “The fair value of the original 40% holding and the fair value of the non-controlling interest should both be estimated using the market value of the shares.”

Therefore, you would have to calculate NCI using the share price of Club, which is given as $1.60.

FV of NCI at acquistion (as a subsidiary) = 15% (NCI %) x $700m (Share capital) x $1.60 (Share Price) = $168m.

Apply same principal to original holding to get fair value of original investment using the 40% acquired.

Hope this helps!

[Author]

Posts