20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March and June 2025 exams.
Get your discount code >>

Acquisition and firm’s value

This topic has 3 replies, 2 voices, and was last updated 2 years ago by John Moffat.

Viewing 4 posts - 1 through 4 (of 4 total)

Author
Posts
August 21, 2022 at 1:58 pm #663855
Ron123
Participant
- Topics: 72
- Replies: 93
Hi, I would like to confirm one thing..
The total value of a firm (e.g. A Co) consists of value of equity (Ve) + value of debt (Vd). When an acquirer (e.g. B Co) wants to acquire A Co, then the value of A Co attributable to B Co is only Ve because the Vd has to be deducted, or the value of A Co attributable to B Co is still Ve + Vd?
Thank you.
August 22, 2022 at 10:36 am #663903
John Moffat
Keymaster
- Topics: 57
- Replies: 54660
It depends whether or not B is taking over the debt in A.
August 22, 2022 at 2:40 pm #663940
Ron123
Participant
- Topics: 72
- Replies: 93
I see. Now I understand.
August 22, 2022 at 4:11 pm #663945
John Moffat
Keymaster
- Topics: 57
- Replies: 54660
You are welcome 🙂
Author
Posts

Viewing 4 posts - 1 through 4 (of 4 total)

The topic ‘Acquisition and firm’s value’ is closed to new replies.