Doric Co – Pilot Paper – BPP Revision Kit

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October 25, 2016 at 4:14 pm #345990
sogan0
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Please help me understand on the answer in part C

on the Amount of MBO funds needed to be pay shareholders
How do we arrive to 60(Amount of MBO funds needed to pay shareholders)
October 25, 2016 at 4:14 pm #345991
sogan0
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Hi Tutor
October 25, 2016 at 4:22 pm #345993
John Moffat
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The current market value of the shares in Doric is $40/0.40 = 100m shares x $0.50 = $50M.

The question says that they will be purchased at a premium of 20%, so $50M + 20% = $60M.
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