Goodwill upon acquiring summit Summit Corp. has 25 million shares outstanding and trades at $40 per share.Summit has net identifiable assets with a book value of $800 million and afair value of $900 million. Pinnacle Inc. purchases all of Summit Corp. stockfor $45 per share. How much will Pinnacle record as goodwill uponacquiring Summit?a. $225 millionb. $325 millionc. $425 milliond. $525 million

Step 1: Definition of GoodwillGoodwill is the excess amount paid by an acquiring company over the…

Answered: Summit Corp. has 25 million shares…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 11MCQ

See similar textbooks

Similar questions

Target inc. has 30 milion shares solve this accounting questions
Hi expert please give me answer general accounting question
Do fast answer of this general accounting question
Get correct answer general accounting
Determine: 1. Amount of consideration 2. Amount of goodwill (gain) 3. Assuming that P Company is an SME, how much is the goodwill or gain?
How much is the cost of investment ?
ACE Ltd has an outstanding shares of 10,000,000 shares. Kimmy Ltd purchases 100,000 shares of ACE Ltd at $4 per share. Transaction cost is $1,000. How much will the company capitalise if the investment is classified at fair value through OCI? Choose one of the following answers. 401,000 None of the above 399,000 400,000
Hw.54. Leader has business assets worth $8 million and NOL carryovers of $1million expiring in 14 years and of $2 million expiring in 15 years, and 100 percent of Leader’s stock is worth $10 million. If Leader sells its business assets without recognizing gain or loss, Leader can invest its $8 million liquid assets in US T-Bills earning 2.1% so that Leader can use its NOLs at the rate of $168,000 per year. The long-term tax-exempt rate is 1.71%. What will the “the §382 limitation” be if an ownership change occurs with respect to Leader’s stock? Will Leader be able to utilize the NOL’s before they expire?
You're given the following details of an acquisition of Target Co. by Acquirer Ltd.. What is the transaction value for this acquisition of Target Co.? Acquisition of Target Co. by Acquirer Ltd. Target Share Price ($/sh.) $85.40 Acquisition Premium 15% Diluted Shares Outstanding (MM) 670 Target Total Debt Target Cash and Cash Equivalents % Debt Financing % Equity Financing Equity Financing Fees Debt Financing Fees Other Transaction Costs $3,562 $5,147 40% 60% 4.0% 1.5% $800
Veghie Co is acquiring Fruit Inc for $25,250 in cash. Veggie Co has 2350 shares outstanding at a market price per share of $39. Fruits Inc 1500 shares outstanding at $16 per share. Neither firm has outstanding debt. The incremental value (synergy) of the acquisition is $2300. What is the value of Veggie Co after acquisition? A) 92,700 B) 88,950 C) 56,650 D) 89,150 E) 73,750
Write the complete solutions legibly.
A 135.

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS