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