Hi, for part (c), under the impact of bid on EPS, please may I know what is meant by the post-tax opportunity cost of lost interest on CACE surpluses of $11.36m (for cash offer and mixed offer)?
Thank you.
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BPP Revision Kit Q.27 Louieed
4y ago#1Paying out cash will mean that they lose interest that they could have earned on the cash.
Given that interest is taxable, they will lose the interest but pay less tax - so the net amount lost is the after-tax interest.
Now I understand. Thank you :)
4y ago#3You are welcome.
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