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BPP revision kit Q.28 Makonis

RRon4y ago
Hi, please may I know the meaning of this sentence in the case scenario (in the last paragraph): "Makonis Co has offered to acquire Nuvola Co through a mixed offer of one of its shares for two Nuvola Co shares plus a cash payment, such that a 30% premium is paid for the acquisition." Does it mean that (based on the sample answer), the share-for-share offer now implies a premium of $0.50 per share (as per calculated). Then, a 30% premium for cash offer implies a premium of $0.72 per share. However, the $0.50 is already paid via share-for-share offer, so the cash payment to be paid now is only $0.22 per Nuvola share? ** If I were to be given another scenario, where the share-for-share offer already implies a premium of $0.90 per share, and a 30% premium for cash offer still implies a premium of $0.72 per share, then there will be no more cash offer already, since the $0.90 per share already cover all the costs?
John MoffatJohn MoffatTutor4y ago#1
I am confused by your question. The payment is being made partly in shares and partly in cash (not one or the other but a mixed offer).
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