In question 3 june 15.venture capitalist agreed to provide leverged finance for 50% equity stake in co through 30 billion and 20 billion loan.And the managment vl contribute 5 million equity share.
In the solution sheet when the book value of equity is calculated the sum of 1000,000 is taken.
I dont understand why the 5 million generated through bonds have been taken as equity .
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MBO
10y ago#1The question says in note (iii) that they will buy 5M shares, and in the next line that the management will buy 5M shares - which is a total of 10M shares.
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