ACCA (AFM) past year (6 March 2020)

Hi. For Q 1 (b), the value attributable to Matravers Co’s investors is calculated as $14,375m + $6,500m = $20,875m. I understand that the $14,375m is the amount payable to Matravers Co’s shares, and the $6,500m is the long term loan of Matravers Co.

Please let me confirm whether my interpretation below is correct:

“The value attributable to Matravers Co’s investors consists of $14,375m, which is the amount payable to Matravers Co’s shares, and $6,500m, which is the amount payable to Matravers Co’s loans. Both shares and loans are added because the equity and liability are part of Matravers Co. Also, the asset of Matravers Co has been accounted for in the previous calculation of total present value of free cash flows. Hence, when Matravers Co was acquired, all the assets, liabilities, and equity have been taken into account.”

Please may I know whether my interpretation above is correct? Or is my interpretation is incorrect in some way? Is there any other explanations/elaborations for the interpretation above?

Thank you. 🙂