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Hello Sir, for the answer to the PYQ march/june 2019 Q3 part (a)
Advantage of demerger
:”Newimber CO ‘s shareholder will continue to own both companies. If shareholders are concerned abt th3 diversification of their portfolio, this will remain unchanged.”What is the remaing uncharged in the paragraph referring to? What is the meaning?
It refers to the diversification of their portfolio. If they want to diversify then the demerger won’t make things any different.
” In return for 40% of the issued share capital of Newimber Co,its current shareholders will received 100% of the issued share capital of Poynins Co”
How its actually work? Is it all the Newimber Co SH will receive 100% of the share of Poynins Co by share for share exchange based on the respective holding and based on Poynins Co ‘s share price?
For example, holding One Newimber share worth $1 will be reimbursed with one Poynins Co share worth $0.40?
Thank you.
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