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Pre-acquisition dividends
Pre-acquisition dividends may also arise in the following situations;1) Where the holding company acquires the subsidiary company’s shares cum-dividend and thus dividends eventually received will all be pre-acquisition.
2) If the subsidiary company makes post-acquisition losses, and pays out dividends then this dividends are assumed share come out of the pre-acquisition profits and are thus pre-acquisitioned.
What is Acid-test ratio A measurement of the capability of a business to meet its short-term commitments. It is considered by dividing excluding stock, current assets, by curre
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