Bharti Investments Ltd. holds 8000 shares of Phonetel Corporation Ltd. It acquires 7000 shares of Subharti Ltd.
Question:
Bharti Investments Ltd. holds 8000 shares of Phonetel Corporation Ltd. It acquires 7000 shares of Subharti Ltd. from Idea Investments Ltd. in exchange for these shares. Determine the cost of shares acquired by Bharti Investments Ltd. under the following three situations:
1. If shares of both Phonetel Corporation Ltd. and Subharti Ltd. were listed at BSE and their quoted prices on the day of the deal were Rs. 452 and Rs. 500 per share respectively. The brokerage payable on sale in the BSE is Rs. 4 per share and Rs.5 per share respectively.
2. If Subharti Ltd. were unlisted and therefore its market value were not known.
3. If Phonetel Corporation Ltd. were unlisted.
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To determine the cost of shares acquired by Bharti Investments Ltd under the given situations we need to consider the market value of the shares invol...View the full answer
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