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Forums › ACCA Forums › ACCA FM Financial Management Forums › 2019 sept/dec q3(b) Kerrin & danton
Dear Sir
Could you show how to calculate the increase in shareholder wealth
In cash offer 4.2% Kerrin Co & 24.1% Danton Co
In share-for- share 1.7% & 30.9%
Thanks
For Kerrin (cash offer) the new value is 4127.7 as against the old value of 3960.
So the increase is (4127.7 – 3960) / 3960 = 4.2%
For Kerrin (share for share offer) the new value is 4028.2 as against the old value of 3960.
So the increase is (4028.2 – 3960) / 3960 = 1.7%
It is the same workings for Danton.