Hi Mike,
Pact acquired 80% of the equity shares of Sact on 1 July 2014, paying $3.00 for each share acquired. This represented a premium of 20% over the market price of Sact’s shares at that date.
What would be the market price of Sact’s shares at acquisition?
Answer : 3.00-(3.00*20/120)=$2.5
Why do we do 20/120???
Is it not 3.00-(3*20/100)=$2.4?
Its a small calculation but I always get confused which is the right one
Ask the Tutor ACCA FR
Share price calculation
10y ago#1"This represented a premium of 20% over the market price of Sact’s shares at that date."
What's 20% of $2.40?
Need I say more?
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