Question 2b
Examiners Report

Part (b) asked candidates to calculate the maximum premium (the amount of value created from combining two companies over and above the sum of the values of the two companies separately), based on the two methods preferred in-turn by the acquirer and the target.

This was not done well on the whole. Few candidates knew how to approach answering this question and most tried to use the figures given in innovative but incorrect ways to get to an answer.

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