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Please answer (b) and (c) Your firm would like to take over a manufacturing entity located in Accra, Stacy Ltd. The target company's financial position
Please answer (b) and (c)
Your firm would like to take over a manufacturing entity located in Accra, Stacy Ltd. The target company's financial position as of now is presented in the statement of financial position exhibited below. Stacy Ltd is registered with 5,000,000 shares but only 500,000 shares have been issued and paid up. Your firm is considering how much to quote in its bid for Stacy Ltd. Required: (a) Based on net assets, how much should your firm offer for each share of Stacy Ltd.'s equity stock? (b) Supposing under the acquisition deal, the bank loan and long-term investments will not be transferred to your firm, how much should your firm quote for a share of the target entity's equity stock considering its assets and liabilities? (c) Assume that your firm will not take over the long-term investments and bank loan and the following fair value assessments are done: - Inventories worth GH\&9,500 are obsolete. It is expected that GHe80,000 will be realised from sale of the other inventories. - Uncollectible trade receivables are estimated to be GHe15,000. - Current value of property, plant and equipment is GH\&2,155,800. Determine the value your firm should quote for a share in Stacy Ltd. Your firm would like to take over a manufacturing entity located in Accra, Stacy Ltd. The target company's financial position as of now is presented in the statement of financial position exhibited below. Stacy Ltd is registered with 5,000,000 shares but only 500,000 shares have been issued and paid up. Your firm is considering how much to quote in its bid for Stacy Ltd. Required: (a) Based on net assets, how much should your firm offer for each share of Stacy Ltd.'s equity stock? (b) Supposing under the acquisition deal, the bank loan and long-term investments will not be transferred to your firm, how much should your firm quote for a share of the target entity's equity stock considering its assets and liabilities? (c) Assume that your firm will not take over the long-term investments and bank loan and the following fair value assessments are done: - Inventories worth GH\&9,500 are obsolete. It is expected that GHe80,000 will be realised from sale of the other inventories. - Uncollectible trade receivables are estimated to be GHe15,000. - Current value of property, plant and equipment is GH\&2,155,800. Determine the value your firm should quote for a share in Stacy LtdStep by Step Solution
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