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Martinez Corporation is interested in purchasing Lau Company Ltd. The total of Lau's net income amounts over the past five years is $745,000. During one
Martinez Corporation is interested in purchasing Lau Company Ltd. The total of Lau's net income amounts over the past five years is $745,000. During one of those years, Lau reported a gain on discontinued operations of $94,100. The fair value of Lau's net identifiable assets is $680,100. A normal rate of return is 15%, and Martinez wants to capitalize excess earnings at 20%. Calculate the estimated value of Lau's goodwill. Estimated value of Lau's goodwill
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