CIMAPRA19-F03-1 practice question 9 of 35
Company A is a large well-established listed entertainment company and Company B is a small unlisted company specializing in providing online media…
Choose your answer, then check it against the explanation.
Company A is a large well-established listed entertainment company and Company B is a small
unlisted company specializing in providing online media streaming.
Company A has a gearing ratio of 60% (using book values) and interest cover of 2.
Company A is considering making an offer for Company B, either a cash offer financial by raising
additional debt finance or a share-for-share exchange.
Which of the following is most likely to occur if Company A offers a share-for exchange rather than
offering cash finance by raising debt?
Question 9 of 35
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