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Hi i want to ask how they hav calculated 10.26 value in calculating gain in value to nente share 17.9% in share for share offer appendx 2 plzreply soon
It is june 12 not 11.
If Mije Co successfully acquires Nente Co, the expected value of a share of the combined company is $5.13 as calculated in the answer.
Now the share exchange is two of Mije Co’s shares for three of Nente Co’s shares.Three shares of Nente Co will now be valued as two of Mije Co’s which is $5.13*2 = $10.26.
The market price of 3 Nente Co’s shares before acquisition is $2.9*3=$8.7
So the value of Nente shares has increased from $8.7 to $10.26. Taking ($10.26-$8.7)/$8.7 = 17.9%
Hope that helped Rockerz
oh ya itsss jun 12 ya i got it and thnksss alotttt buddy for helping ive some other queries also wil be kind if u do thankss again
hi in question 3 proposal jun 12 in proposal 1 where they got 280c figure in calculating retain earning 17.5m kindly do explain
The share price at the date of issue is 40c and at the date of repurchase it is $3.2(320c).
The company is now buying back the shares at a price higher than dt for which it was sold.So in other words,the company is spending an additional 280c(320c-40c) on those shares and that is why $17.5m is being deducted from the retained earnings.The value of $17.5m can also be calculate thus,based on the above explanations.
N° of shares $48m/40c = 120m
The value of debt of $20m can be used to buy 6.25m($20m/$3.2) shares.
The additional amount spent on buying back the 6.25m shares is given by: (320c-40c)*6.25m shares.=$17.5mDo u agree?
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