Refer to Note 2 of CVS Corporation’s annual report in the Supplement to Chapter 1. The company announces plans to finalize the acquisition of Eckerd Drugstores from J. C. Penney in early 2005. What is the purchase price of Eckerd? Is CVS paying more than the fair value for the net assets of Eckerd? If so, how much more is it paying and what does the excess represent?

Comparison Case: CVS Versus Southwest Investments in Derivatives