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Acquisition and firm’s value

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

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August 21, 2022 at 1:58 pm #663855
Ron123
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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
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It depends whether or not B is taking over the debt in A.
August 22, 2022 at 2:40 pm #663940
Ron123
Participant
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I see. Now I understand.
August 22, 2022 at 4:11 pm #663945
John Moffat
Keymaster
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- Replies: 54483
You are welcome 🙂
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