In August 2009, The Walt Disney Company announced that it would acquire Marvel Entertainment, Inc., in a $4 billion cash and common stock deal. On a per-share basis, the consideration given by Disney to Marvel shareholders represents a 29% premium over Marvel's share price at the date of acquisition. Disney acquires the more than 5,000 characters in Marvel's library, including Iron Man, Spider-Man, X-Men, Captain America, and the Fantastic Four. Exhibit 8.33 presents the condensed consolidated balance sheet of Marvel at the end of its June 30, 2009, second quarter.

REQUIREDa. From a strategic perspective, discuss why you believe Disney would make this acquisition.Note: If you are not familiar with this acquisition, search online for articles relating to the acquisition to help you formulate your answer.b. Assuming that the assets and liabilities of Marvel approximate their individual fair values at the date of acquisition, compute goodwill.c. This is a 100% acquisition. What role does the 29% premium play in the computation of goodwill? If this were a less-than-100% acquisition, how would the 29% premium affect the computation of the non controlling interest?d. Disney will record a decrease in its cash and an increase in its shareholders' equity totaling $4 billion at the date of acquisition. Contrast the rest of the financial statement effects on Disney's own records and on its consolidated balance sheet between two scenarios: Marvel is dissolved (a merger) and Marvel continues to exist as a separate legal entity (an acquisition).e. It is unlikely that the assets and liabilities of Marvel as shown in the condensed quarterly balance sheet approximate their individual fair values at the date of acquisition. Indeed, some of Marvel's most valuable resources might not be recognized on their balance sheet. As a result, the entire excess acquisition price is not likely to be assigned to goodwill. Identify items that are likely to receive a portion of the allocation based on the differences between their book values and fair values.

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Exhibit 8.33 Marvel Entertainment, Inc., Condensed Consolidated Balance Sheets (unaudited) (in thousands, except per-share amounts) June 30 December 31 2009 2008 ASSETS Current assets: Cash and cash equivalents $ 105,335 $ 81,039 38,220 Restricted cash 12,272 Short-term investments 32,975 Accounts receivable, net 29,471 144,487 Inventories, net 13,473 11,362 Income tax receivable 206 2,029 Deferred income taxes, net 25,497 34,072 Prepaid expenses and other current assets Total current assets 9,164 $ 197,070 4,194 5,135 $ 347,667 3,432 Fixed assets, net Film inventory, net 192,068 181,564 Goodwill 346,152 346,152