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Question 3 [30%] Two private companies, South Limited and North
Limited, each have 5 shareholders, say, Shareholders A, B, C, D and
E. Shareholders of South Limited have equal shareholding (i.e., 20
shares each). Shareholders V, W, X, Y and Z of North Limited hold
50 shares, 44 shares, 3 shares, 2 shares and 1 share, respectively.
Each of the companies is worth $100 million. Now, Shareholder A of
South Limited wants to transfer 1 share out of the 20 shares he
holds to one of the existing shareholders. Coincidentally,
Shareholder V of North Limited wants to dispose 1 share out of the
20 shares he holds. All the other shareholders (i.e., W, X, Y and
Z) are interested. In both cases, the disposition should be at a
fair (justifiable) value. It is assumed that shareholder who
acquires the share in either case will pay a price that they
consider fair. a) What should be the value of the South Limited
share to each of the other shareholders? Briefly explain? [10%] b)
What should be the value of the North Limited share to each of the
other shareholders? Briefly explain? [15%] c) What assumption(s),
if any, have you made? [5%]