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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?
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