Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 95,000 $ 22,000 Shares outstanding 52,000 17,000 Pre-share values: Market $ 52 $ 21 Book $ 15 $ 10 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $6 per share, and that neither firm has any debt before or after the merger. a. Assuming the pooling of interests method is used, what is the equity of the combined firm? Equity value $ b. List the assets of the combined firm assuming the purchase accounting method is used. Assets from X $ Assets from Y Goodwill Total Assets XY $ Please dont provide solution image based thnx
Consider the following premerger information about Firm X and Firm Y: Firm X Firm Y Total earnings $ 95,000 $ 22,000 Shares outstanding 52,000 17,000 Pre-share values: Market $ 52 $ 21 Book $ 15 $ 10 Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $6 per share, and that neither firm has any debt before or after the merger. a. Assuming the pooling of interests method is used, what is the equity of the combined firm? Equity value $ b. List the assets of the combined firm assuming the purchase accounting method is used. Assets from X $ Assets from Y Goodwill Total Assets XY $ Please dont provide solution image based thnx
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
|
Consider the following premerger information about Firm X and Firm Y: |
| Firm X | Firm Y | |||||
| Total earnings | $ | 95,000 | $ | 22,000 | ||
| Shares outstanding | 52,000 | 17,000 | ||||
| Pre-share values: | ||||||
| Market | $ | 52 | $ | 21 | ||
| Book | $ | 15 | $ | 10 | ||
|
Assume that Firm X acquires Firm Y by paying cash for all the shares outstanding at a merger premium of $6 per share, and that neither firm has any debt before or after the merger. |
| a. |
Assuming the pooling of interests method is used, what is the equity of the combined firm? |
| Equity value | $ |
| b. |
List the assets of the combined firm assuming the purchase accounting method is used. |
| Assets from X | $ |
| Assets from Y | |
| |
|
| Total Assets XY | $ |
Please dont provide solution image based thnx
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