PartyCo acquired a $65\text{'}\%$ equity sharehol ing in SoireeCo on $1$st January $2023$ maling it a subidiary.

Consideration for the acspuaition was a cash paymenit of E$5$ million along with a $2$ for $5$ share exchange.

PartyCo agreed to pay a further $5$ million deferred for three years. At the date of acquisition

the market value of the shares in SoireeCo was $2\mathrm{.}50$ each. However, the market value of shares in

PartyCo has been deleted from the files acridentally

At the time of acquisition, the Equity of SoireeCo was made up of Share Capital of $10$ million $($Each

share had a nominal value of $50$ cent$)$; Share Prernitum of $8$ million and Retained Earnings of $22$

million, A fait value uplift of $750,000$ was required for equpment with a $5$ year remaining life. Due to

trading losses during the year SoireeCo goodwill was deemed to have suflered an impairment of $25$

million and the final camrying amount at the year end $31$st Decemiber $2023$ was $9\mathrm{.}22$ million.

Group cost of capital is $8\%$ and policy is to value non contoiling interest at fair value using the company's share price at acquisition

Required

Using the data provided, calculate the total fair value of share eschange portion of the consideration and the

market value of one PartyCo equity share as at the date of acquisition

Note: Show ALL workings to maximize marks awarded

Answer rating: 100% (QA)

1 Total Fair Value of Share Exchange Portion of Consideration SoireeCo shares had a market value of ... View the full answer