The working paper eliminating entry recorded by Acquired Company on January 1, 2017, the date of acquisition of its subsidiary follows: Common stock-Acquiring Company APIC-Acquiring Company Retained Earnings-Acquiring Company Inventory Plant Assets (net) 200,000 300,000 250,000 75,000 105,000 Patent 70,000 Goodwill 200,000 920,000 Investment in Acquiring Company Non-controlling interest in Acquired Company 280,000 Of the goodwill recorded, 30,000 belong to the non-controlling interest. Determine the percentage of outstanding voting shares of the subsidiary acquired by the parent.
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
Present your answer in percentage (for example 50.55% should be 51%)
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