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Cigno Co (Sep/Dec 15)

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May 22, 2022 at 2:00 pm #656185
taskmaster
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Hi John,
In part (b)(1) I have 2 doubts:

1. They have calculated the premium as (Share price*number of shares*35%), I thought I have to find FCFE then find FCFE per share than 35% on it will give me the premium payable. What is the meaning of the value I get from my approach?

2. They have included in the purchase cost the amount of debt along with MV of equity and premium, why have they included the value of debt also?
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