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Am in Becker. Studying FAR Class 3. Working on the Equity Method. Stuck on p. F3-16 section E. “Difference Between NBV of Investee’s Net Assets and Purchase Price of Investment in Investee Account.”
This is one of those times when Becker drives me nuts. They start talking (in the lectures) about stock selling at a “Premium”. I have never heard of stock selling at a premium. I’ve heard of bonds selling at a premium, but never stock.
I kind of understand the method they describe, but fully comprehending the method gets blocked because it’s hard to imagine a situation where stock sells at a premium.
Can someone please explain what is happening in this situation?
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