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Pursuit 6/11

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Pursuit 6/11

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.
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    Posts
  • May 26, 2015 at 11:53 am #249135
    BrianH
    Member
    • Topics: 44
    • Replies: 40
    • ☆☆

    Hi sir

    When the synergy benefits are being calculated, in the bpp solution, should the value of debt of fodder ($40,104,000 * 10%) not be subtracted from the value of the benefits as the question sates that pursuit would pay off ‘any outstanding debt that fodder had’?

    Thanks

    May 26, 2015 at 3:18 pm #249197
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54808
    • ☆☆☆☆☆

    No – they are correct. The value of the business is the business ‘as it stands’ and would therefore automatically be assuming that the acquirer was taking over the existing debt.

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