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- February 23, 2020 at 8:53 am
They have asked to design a share for share offer ..i cannot understand how it has been calculated as 18 kerrin shares for every 7 danton co shares please explain …is it the same way as done in opao co dec 2018 where it was asked to make a share for share offer ?February 23, 2020 at 11:46 am
Presumably you are happy with the working in that there are 357.14M new shares for 140M existing shares.
So the share issue is 357.14 for 140.
You can then simplify it in various ways – it doesn’t matter. What the examiners answer has done is divide both by 20 which gives 18 for 7.
Alternatively divide both by 10 which gives approximately 36 for 14.
Of divide both by 140 which gives 2.55 for 1.
Again, it doesn’t matter.February 23, 2020 at 1:02 pm
I am okay with the workings till 81.2 which gives maximum premium accrued to kerrin cos shareholders but why are we calculating new shares issued by kerrin co ..as kerrin is acquiring danton co so the new shares will be issued to danton and the shareholding of danton co shareholders will remain the same ? Is that the reason ..
Moreover please tell how 2.1 and 1 is calculated ?February 23, 2020 at 5:04 pm
Kerrin is buying Danton and therefore Danton’s shares will be cancelled and the shareholders will either receive cash or shares in Kerrin or a combination of cash and shares.
2.1 is 4041.2/1920.5.
If there is a share for share offer, then of the total value of Kerrin after the takeover of 5,961.7, 4041.2 must be the worth of the original Kerrin shareholders and 1920.5 must be the value of the shares in Kerrin given to the original shareholders of Danton.February 24, 2020 at 10:15 am
Thanks a lot for ur helpFebruary 24, 2020 at 2:43 pm
You are welcome 🙂
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