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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Avem 12/14
Hi sir, i watched the lecture on this question, but i just wanted to clarify when we take the value of equity for calculation of equity beta of fugae, why dont we take their Value of equity+ 30% premium they get, since that will be their post acquisition value?
And when we calculated the figure for when lumi does pay us, for the scenario of it not growing in the first year, for calculating if we still continue why did we not deduct 42000? but when we calculated if we continue scenario for if there is growth from second year we deducted 42000
In answer to your first question, it is not Fugae who will receive the premium on the sale. It is Nahara who will get the premium when they sell Fugae to Avem.
Maybe I am not understanding your second question, but in calculating the NPV the $42,000 has been subtracted in both cases.
Thank you
You are welcome 🙂
