QUESTION 27 Turner, Inc. has $4.2 million in net working capital. The firm has fixed assets with a book value of $48.6 million and a market value of $53.4 million. Martin & Sons is buying Turner, Inc. for $60 million in cash. The acquisition will be recorded using the purchase accounting method. What is the amount of goodwill that Martin & Sons will record on its balance sheet as a result of this acquisition? O A. $0 B. $2.4 million O C. $6.6 million OD. $7.2 million O E. $11.4 million QUESTION 29 Escape Cruise Lines is seeking to expand its operations in the Caribbean by acquiring Grupo Viva Cruise Lines in a stock-and-cash deal, (75% stock, 25% cash). You have determined that Grupo has 15% of its net assets (measured by fair market value) invested in U.S. based tour companies(buses, hotels, helicopters) and Escape Cruise Lines insists that Grupo keep these assets out of the deal. Grupo wants the deal tax-free. Knowing this, what form of deal would you recommend to Escape's CEO? O A. Forward triangular merger ("A" type reorganization) O B. Reverse triangular merger ("A" type reorganization) O C. Voting stock-for-stock acquisition ("B" type reorganization) D. Voting stock-for-assets acquisition ("C" type reorganization) O E. A direct merger ("A" type reorganization) QUESTION 32 Which factors would be considered in determining the feasibility of financing a proposed takeover? A. Potential dilution in EPS of the combined firms. B. Impact on overall borrowing costs of the combined firms. C. Possible violation of loan covenants on existing debt of the acquiring company D. Speed and certainty of closing E. All of the above