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Nente co

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Nente co

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  • February 13, 2020 at 9:28 am #561641
    Avatarrimshy
    Member
    • Topics: 95
    • Replies: 91
    • ☆☆

    Sir i cannot understand how the gain to mije co shareholders have been calculated for both cash and share for share offer please explain …i got the answer of 5.13 ie gain to nente co shareholders but i have doubt in it as why we are using boot strapping method in this case as we use that only if PE Ratio of seller is higher than that of buyer

    I thought the combined market value could also be calculated by ( 48000+6960+150)=62910

    February 13, 2020 at 4:28 pm #561707
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54838
    • ☆☆☆☆☆

    The question specifically says that Nente will operate on a PE level of 15. We are using 15 because the question says so, which is nothing to do with assuming bootstrapping.

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