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And why is there any adjustment to current assets when using net assets valuation?
Shouldn’t it deduct 4m as the bank overdraft need to be repaid ?
Thanks
The interest on the convertible load is 20M x 6% = 1,200,000
This is added to the interest on the 8% bond which is 2,400,000 in the first year.Bento is repaying the bank overdraft and only the remaining assets of Okazu are transferred to the new company.
Dear John,
I do understand that the interest on the convertible load is 20M x 6% = 1,200,000, and this amount is added to the interest on the 8% bond which is 2,400,000 in the first year. So we now got a total of 3,600,000.
But why we don’t need to add the original finance cost which is 1,600,000 to it? Is it because that the question state “the group finance cost are allocated by Bento to all its subsidiaries in pre-agreed proportions”? Meaning that the NCL are transferred to the other subsidiaries of Bento?
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