CIMA Financial Strategy F3 Question # 31 Topic 4 Discussion

CIMA Financial Strategy F3 Question # 31 Topic 4 Discussion

F3 Exam Topic 4 Question 31 Discussion:
Question #: 31
Topic #: 4

Company A is a large listed company, with a wide range of both institutional and private shareholders. 

It is planning a takeover offer for Company B.

Company A has relatively low cash reserves and its gearing ratio of 40% is higher than most similar companies in its industry.

 

Which TWO of the following would be the most feasible ways of Company A structuring an offer for Company B?


A.

Cash offer, funded by borrowings.


B.

Share for share exchange.


C.

Cash offer, funded from existing cash resources.


D.

Cash offer, funded by a rights issue.


E.

Debt for share exchange.


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