Grammy Co. has acquired ABC Inc. for $10 million. Before merger, Grammy Co. had a market value of $20 million and a book value of $15 million. However, ABCs book value and market value were similar and equal to $7 million before merger. Is there any goodwill in the balance sheet of the merged firm? If yes, what is the amount of this goodwill? *

There is a goodwill of $10 million

There is a goodwill of $3 million

There is a goodwill of $7 million

There is no goodwill

None of the above