Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › PREMIUM PAYABLE ON ACQUISITION
- This topic has 7 replies, 3 voices, and was last updated 7 years ago by John Moffat.
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- January 25, 2017 at 8:48 pm #369573
Hi John
Love your lectures, but regrettably I can’t seem shake this P4.
need to know if my understanding of premium payable on acquisition is ok.I understand the premium payable to be equal to or lesser than the additional value created/earned through acquisition.
so if company A value $300.00
company B Value $400.00and company Ab Values $1000.00
then premium should be equal or lesser than $300.00
I anxiously await your reply.
January 26, 2017 at 6:50 am #369605What you have written is correct 🙂
January 26, 2017 at 3:50 pm #369777thank you.
January 27, 2017 at 7:38 am #369893You are welcome 🙂
January 28, 2017 at 9:40 am #370033hi sir ,
please could you explain how the premium would be equal or “less” than$ 300.
why is there a possibility of being less?January 29, 2017 at 8:08 am #370090Because why should they give all of the gain (premium) to the shareholders in the company being acquired?? The acquiring company will want to have some benefit 🙂
January 29, 2017 at 9:38 am #370116oh right ,
that was very simple,got it thanks.January 29, 2017 at 4:30 pm #370148You are welcome 🙂
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