Good morning!
I am unable to understand why do we take into account the share options in the first place when valuing the co.
this is a payment that the company has to make and is like any other 'payable'..no?
regards
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Burcolene
9y ago#1This is more of a P2 problem - there will not be a payment. If the options are exercised then effectively the company will be issuing shares at a cheap price, which will reduce the market value of the company.
thank u....and one last question on this for part (b)
the answer says its a type III acquisition. but both businesses are the same however, since the buyout will be leveraged .. there shd only be financial risk .... the business risk shd not change..no?
9y ago#3The different types (type 1, type 2 and type 3) are no longer examinable.
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