Question 3 Company AB has a market value of GH¢50 million. Company CD has a market value of GH¢200 million. CD has determined that if it combines resources with AB, cost savings will be worth GH¢25 million today. On this basis CD makes an offer to buy AB. If CD makes a cash offer of GH¢65 million for all the shares of AB, what is the cost of this purchase to CD? (i) What are the gains of this transaction?
(ii) Suppose CD has issued 100 of its shares to its shareholders, and is considering issuing 30 shares to the shareholders of AB, what is the cost of the share offer?
(iii) What is the net present value of the transaction under the cash offer to CD?
(iv) What is the net present value under the share offer?

Kiona co. set up a petty cash fund for payments of small amounts. the following transactions involving the petty cash fund occurred in may (the last month of the company's fiscal year). may 1 prepared a company check for $350 to establish the petty cash fund. 15 prepared a company check to replenish the fund for the following expenditures made since may 1. a. paid $109.20 for janitorial services. b. paid $89.15 for miscellaneous expenses. c. paid postage expenses of $60.90. d. paid $80.01 to the county gazette (the local newspaper) for an advertisement. e. counted $26.84 remaining in the petty cashbox. 16 prepared a company check for $200 to increase the fund to $550. 31 the petty cashier reports that $380.27 cash remains in the fund. a company check is drawn to replenish the fund for the following expenditures made since may 15. f. paid postage expenses of $59.10. g. reimbursed the office manager for business mileage, $47.05. h. paid $48.58 to deliver merchandise to a customer, terms fob destination. 31 the company decides that the may 16 increase in the fund was too large. it reduces the fund by $50, leaving a total of $500.