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ABC Inc. has acquired GHW Corporation for $13.2 million. One year after acquisition, GHW had sales of $9 million, a gross margin of $3.5 million,
ABC Inc. has acquired GHW Corporation for $13.2 million. One year after acquisition, GHW had sales of $9 million, a gross margin of $3.5 million, net income of $1.2 million, and total assets of $24 million.. Assume no issuance or buybacks of stock after the acquisition.
a. What is ABCs ROI on its investment in GHW after one year?
b. If GHW paid $200,000 in dividends near the end of its first year of acquisition, what is the stockholders equity of GHW one year after acquisition?
c. What was GHWs profit margin (percentage)
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