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I find it difficult to understand the questions involving exchange of shares while acquisition.
Acquisition done thru cash payment of the stake in the subsidiary is straightforward but acquiring thru shares is difficult please help.At the end of chapter 8 in the free course notes there is an example from a past exam question. Within the notes I have taken the steps one by one to explain what’s happening.
Having done that the students from the course are then advised to practice on the mini-exercises towards the end of the course notes.
I can’t write out a full commentary on the steps involved.
However, if you would care to select any particular question with which you are having difficulty, then I shall explain that one for you
OK?
Hi Mike, Page 54, where do you get 55,500? Is the cost of the investiment not 55,900 ie
(6000+33000+14400+2500)?Yes, it’s a misprint! The detailed elements of the cost of acquisition are all shown, all explained – even to the extent of saying “add to that the nci investment value of 1,000 shares valued at $2.50 = $2,500”
Ok! The typing came up with $55,500 and it should have been $55,900
I’ve just finished a book by the author David Baldacci (good book!) and within that I counted 11 printing errors and two occasions where the wrong name was given to the speaker. And Baldacci has an army or proof readers, editors, research assistants and hangers-on to help publishers avoid such errors.
At least the $55,500 / $55,900 error in an exam would have lost me no marks!
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