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Hi
Details:
Co A
P/e: 10
Po: $8
PAT: 800K
OSC 1MCo B
P/e 9
Po:$3.6
PAT 400K
OSC 1MA offer to buy B at 4.40
Which then makes the P/e for B to 11
and issued new shares of 550K (ie: 4.4/8)Wanted to know how to derive the terms of the shares?..
given the answer is 11 A for 20 BAppreciate if u could explain thanks!
The current MV of B = 9 x 400 = $3,600.
Therefore there are currently 3,600/3.6 = 1,000 shares.They are issuing 550 new shares. So it is 550A for 1,000B
If you divide both by 500 it is the same as 11 A for 20 B
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