None In July 2007, News Corporation entered into an agreement to purchase all of the outstanding shares of Dow Jones and Company for$63 per share. Immediately prior to the News Corporation bid, the shares of Dow Jones traded at $38 per share. The number ofoutstanding shares at the time of the announcement was 83 million. The book value of interest-bearing liabilities on the balance sheetof Dow Jones was $1.48 billion.a. Estimate the cost of this acquisition to the shareholders of News Corporationb. What value did News Corporation place on the control of Dow Jones and Company?Note: For all requirements, enter your answers in billions rounded to 2 decimal places.Estimated cost of the acquisitionValue of controlbillionbillion

aCost of acquisition = (Purchase price * Shares outstanding) + LiabilitiesCost of acquisition = (63…

Answered: In July 2007, News Corporation entered…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On May 31, 2011, Armstrong Company paid P3,500,000 to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet at the time of the acquisition: Current assets P900,000 Current liabilities P600,000 Noncurrent assets 2,700,000 Long-term liabilities 500,000 Stockholders’ equity 2,500,000 Total liabilities and Total assets P3,600,000 stockholders’ equity P3,600,000 It was determined at the date of the purchase that the fair value of the identifiable net assets of Hall was P2,800,000. At December 31, 2011, Hall reports the following balance sheet information: Current assets P800,000 Noncurrent assets (including goodwill…
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