07 Jun Question 1) (TCO C)Fair value determinatio
Question
1) (TCO C)Fair value determination of goodwill and calculating the premium paid over market value in a merger:
Using fair value accounting for goodwill,under FAS 141R, determine the amount of goodwill that “the acquiring company” enters on its balance sheet in the following situation:
Talmadge Corporation is acquiring the target Tyler, Inc. in a merger. Both companies are publicly listed. Tyler’s market valuation in the merger is $6.0 billion, and its equity value on its balance sheet before any adjustments is $3.0 billion. During the merger process, Tyler’s inventories will be written down by $200 million, and its receivables will be written down by $300 million. On the other hand, under fair value accounting, its plant and equipment will increase in value by $700 million, and its patents and trademarks will increase in value by $300 million.
A) What is the new equity value of Tyler on its balance sheet? (10 points)
B) How much goodwill will Talmadge enter on its balance sheet as a result of this merger? (10 points)
C) If the prevailing market value of Tyler was $5.0 billion on the NASDAQ during the three months before the merger announcement, what is the premium over market value that Talmadge paid for Tyler in dollars and percent? (10 points each for dollars and percent)
2) (TCO C) Under FAS 141 R & 141:
How will goodwill impact the balance sheet of the combined entity after the M & A is completed? (10 points)
How do the increased revaluations of fixed assets and other intangible assets
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.