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Hi Everyone,
I have a concerned abt share price of acquirer when calculating the percentage gain under share for share acquisition payment method as follow:
I saw we have two ways to calculate (1) we base on the current share price of acquirer that has been shown in the question; and (2) we have to calculate the expected share price by dividing the add up value of equity (Ve) of acquirer, Ve of target and synergy savings into the converted no of shares.
Which method should be better in the exam in perspective of acquirer and target entity?
Thanks so much!
Usually the question makes it clear whether we are looking from the point of view of the acquirer or the target.
If it is not clear then state your assumption and you will still get most of the marks. (There is rarely just one correct answer for Paper P4 questions because so much depends on assumptions.
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