In August 20X6,Caesar Ltd Acquired the Issued Ordinary Shares of Alesia

question 15

Multiple Choice

In August 20X6,Caesar Ltd acquired the issued ordinary shares of Alesia Ltd in a one-for-one share exchange.Immediately prior to the acquisition,the shares of Caesar Ltd and Alesia Ltd were being traded on the ASX for $12 and $10 per share respectively.Immediately following the offer to purchase the shares,the shares in Alesia Ltd were being traded at $13 per share.From this information,the cost of acquisition would be recorded at:

• A) $12 per share since this the market assessment of the fair value of the shares issued by Caesar Ltd.
• B) $10 per share since this is the fair value of the shares of Alesia Ltd and thus a reliable measure of the fair value of the shares issued by Caesar Ltd.
• C) $13 per share since the shareholders of Alesia Ltd have a choice between accepting the offer of Caesar Ltd or selling their shares in the market, so that $13 per share is the most objective measure of the fair value of the shares in Caesar Ltd.
• D) None of the above.

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