COURSE : CORPORATE FINANCIAL MANAGEMENT II CORPORATE FINANCE PRINCIPLES. COURSE CODE : FIN402

QUESTION 1

i. In a purchase, an accounting term called goodwill is created. Briefly explain goodwill.

ii. Diversification is often mentioned as a benefit of one firm acquiring another. Diversification can produce gains to the acquiring firm if one of three elements is true. Briefly explain the THREE (3) elements.