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MAFA Q2a

Vikram Nagpal (Employed) (155 Points)

13 November 2007

Hello Guys, MAFA question paper was quite tricky this time around...Can anyone help me with the number of shares which would be issued in Q2 (a) of MAFA Nov 2007

cheers,

Vikram

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2 Replies

Sathish Karunakaran (ACA) (614 Points)
Replied 13 November 2007

Had the swap ratio been followed, then the shares to be issued would be : 1 share of A for every 2 shares of T Total shares in T is 180000 Hence shares of A to be issued to T will be 180000/2 = 90000 shares Am I right?

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Vikram Nagpal (Employed) (155 Points)
Replied 13 November 2007

I agree, You are right! But, I checked with someone at the examination hall and he said, it should be based on Market price of shares of the companies. Which would be 180000 sh of T ltd * 14 (MP of T's share) divided by Rs 30 (sh value of A ltd) i.e. 84000 shares and not 90000 shares. Although I do not agree with this. But, I have a this urge to know the correct answer. Thanks a ton for ur reply. Much appreciated Others, Can you please jump in?