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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
This 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?
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