Question
1- Company A has a pre-acquisition value of 600,000. Company B has a pre-acquisition value of 200,000. Company A acquires Company B in a cash
1- Company A has a pre-acquisition value of €600,000. Company B has a pre-acquisition value of €200,000.
Company A acquires Company B in a cash acquisition with a bid value of €300,000.
The benefits arising from the acquisition are valued at €400,000.
calculate how much of these benefits will remain for Company A shareholders after the cost of the acquisition is deducted?
2- Apollo Plc has 100,000 shares on a stand-alone basis, each with a value of €5. Lunar Plc has 50,000 shares on a stand-alone basis, each with a value of €2.
Apollo decides to acquire Lunar in a cash acquisition. Benefits of €200,000 are expected to arise from the acquisition.
Based on the information above, calculate what will be the post-acquisition value per share of the merged group?
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Advanced Financial Accounting
Authors: Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay
7th edition
132928930, 978-0132928939
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