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QUESTION 3(7 marks) Gouda Ltd has 20 million shares with a current market...

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Accounting

QUESTION 3(7 marks)
Gouda Ltd has 20 million shares with a current market value of R10 per share. Halloumi Lus has
12 million shares with a current market value of R6.50 per share.
Gouda Ltd makes an offer of 2 new shares for every 3 currently held in Halloumi Lid. Gouda Lid
has worked out that the present value of synergies will be R30 million.
Required:
3.1 Calculate the expected value of a share in the combined company (assuming that the
given share prices have not yet moved to anticipate this takeover) and advise the
shareholders of Halloumi Ltd whether this offer should be accepted or not.
Show all calculations

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