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Makonis Co (12/13)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Makonis Co (12/13)

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 20, 2016 at 6:26 am #311807
    kimtranvn
    Member
    • Topics: 14
    • Replies: 13
    • ☆

    Dear Sir,

    I am reading BPP Rev Kit the question Makonis (c). In the solution for (c), If 50% premium is offered to Nuvola Co’s equity holders, then they will expect $240 million premium or %1.2 per share, and thererore the cash paid will be $0.7 per Nuvola Co share or $140mil in total.

    How can we get the figure $0.7 per Nuvola Co share?
    Thanks,
    KT

    April 20, 2016 at 8:51 am #311839
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51599
    • ☆☆☆☆☆

    Giving them one M share for every two N shares implies a premium of $0.50 per N share (see the first line of the answer to part (c)).

    Since they will expect a total premium of $1.20 per share, the amount they will get in cash will be $1.20 – $0.50 = $0.70 per share.

    April 21, 2016 at 5:51 am #312000
    kimtranvn
    Member
    • Topics: 14
    • Replies: 13
    • ☆

    Thanks so much

    April 21, 2016 at 8:02 am #312029
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51599
    • ☆☆☆☆☆

    You are welcome 🙂

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    Posts
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