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John Moffat.
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Noah098
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“Pursuit Co estimates that a payment of the equity value plus a 25% premium would be sufficient to secure the purchase of Fodder Co.”
Sir just going by the above statement how do we know that 25% premium is payable over the MV of equity(PV of FCFE) and not the firm(PV of FCF to firm)?
Noah098
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or is it always so the case that debt holders are never given any premium and only shareholders can ever get any premium, if it does get paid
John Moffat
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Any premium goes to the shareholders – it is the shareholders who are being paid when the company is purchased.
Noah098
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