Company U has made a bid for the entire share capital of Company B.

CIMA F3 Question Answer

Company U is offering the shareholders in Company B the option of either a share exchange or a cash alternative.

Advise the shareholders in Company B which THREE of the following would be considered disadvantages of accepting the cash consideration?

Cash consideration is certain whereas Company U's future share price performance is uncertain.

Interest rates on deposit accounts are currently at a historic low and are expected to remain low.

Company U is not expected to change its dividend policy post-acquisition.

Taxation is payable on realised capital gains.

There will be no opportunity to participate in the future economic success of Company U.

F3 PDF/Engine

Get 65% Discount on All Products, Use Coupon: "ac4s65"