Question
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 97,000 $ 23,000 Shares outstanding 54,000 19,000
| Consider the following premerger information about Firm X and Firm Y: |
| Firm X | Firm Y | |||||
| Total earnings | $ | 97,000 | $ | 23,000 | ||
| Shares outstanding | 54,000 | 19,000 | ||||
| Per-share values: | ||||||
| Market | $ | 54 | $ | 16 | ||
| Book | $ | 13 | $ | 5 | ||
| Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $4 per share, and that neither firm has any debt before or after the merger. |
| List the assets of the combined firm assuming the purchase accounting method is used. |
| Assets from X | $ |
| Assets from Y | |
| Goodwill | |
| Total Assets XY | $ |
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Options Futures And Other Derivatives
Authors: John C. Hull
4th Edition
0130224448, 9780130224446
