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Cigno Company 2015

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Cigno Company 2015

  • This topic has 5 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • May 18, 2024 at 4:01 pm #705627
    bear123
    Participant
    • Topics: 6
    • Replies: 6
    • ☆

    Hello, sir.

    Cigno Company (Sept/Dec 5) I understood all the workings for Part (a) (i) “Estimates the value of attributable to cigno companys shareholders”

    Basically we calculated the total value of combined company and deducted the premium paid and and market value of equity of anatra company.

    My doubt is, since we have to calculate “(attributable to Cigno s/h)” wont we have to deduct the percentage of debt too of combined company which is 40% given in the question but the total value of financing structure is not given I guess thats why we cannot?

    May 19, 2024 at 9:55 am #705656
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    But remember that all gains go to the shareholders, not to the debt lenders.

    May 19, 2024 at 11:17 am #705671
    bear123
    Participant
    • Topics: 6
    • Replies: 6
    • ☆

    So we shouldnt apportion it?

    May 19, 2024 at 3:55 pm #705677
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    Not if the question is asking for the value of the firm 🙂

    May 19, 2024 at 4:38 pm #705679
    bear123
    Participant
    • Topics: 6
    • Replies: 6
    • ☆

    Oh. The question should specifically state, value attributable to “equity shareholders of the company” which it does at times.

    Got it. Thanks a lot, sir !

    May 20, 2024 at 9:15 am #705710
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Cigno Company 2015’ is closed to new replies.

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