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Hi, in this question i have the following doubt,
i solved this question this way- the value of combined company is 2201, then i did (2201 x 100)/310 to find out the share for share exchange and balance using cash, why is this wrong?
is it because the cash reduces the value of combined company thats why we cant follow this approach?
You would have been given some marks for what you were doing, but the problem is (as you have written) that the cash paid reduces the value.