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June 2010 Question 2 Part iii

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › June 2010 Question 2 Part iii

  • This topic has 1 reply, 2 voices, and was last updated 15 years ago by shine05.
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  • November 29, 2010 at 3:39 pm #46363
    vikjojo
    Member
    • Topics: 3
    • Replies: 3
    • ☆

    I do not understand where the value of equity of $4.799m has come from when deducting it from the call option of $7.025 . If someone else can explain where that figure has come from I will be very appreciative,

    Many thanks

    November 30, 2010 at 12:17 am #72022
    shine05
    Member
    • Topics: 4
    • Replies: 16
    • ☆

    That is the market value of AggroChem which we has calculated in part i.
    MV=400*1.039/(0.1256-0.039)= $4,799m

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