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Mergers & Acquisitions (M&A) Modeling QUESTIONS & ANSWERS(RATED A) R221,49   Add to cart

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Mergers & Acquisitions (M&A) Modeling QUESTIONS & ANSWERS(RATED A)

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What is the correct formula for Goodwill? A. Market value of acquirer - net identifiable assets of target B. Price paid - fair market value of net identifiable assets of target C. Market value of acquirer - fair market value of target D. Book value of target's equity + Adjustments - ANSWER B....

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  • September 26, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • Wall Street Prep
  • Wall Street Prep
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Mergers & Acquisitions (M&A)
Modeling QUESTIONS &
ANSWERS(RATED A)
What is the correct formula for Goodwill?


A. Market value of acquirer - net identifiable assets of target
B. Price paid - fair market value of net identifiable assets of target
C. Market value of acquirer - fair market value of target
D. Book value of target's equity + Adjustments - ANSWER B. Price paid - fair
market value of net identifiable assets of target


ABC Co. is considering an acquisition of XYZ Co. for a cash offer that values XYZ at
20% higher than its current market capitalization. Given the above data, calculate
the takeover premium in dollar terms (Round to the closest dollar).
ABC Co. Stock Price
$26.00
XYZ Co. Stock Price
$10.00
ABC Co. Cash
$2,000,000
XYZ Co. Cash
$1,500,000

, ABC Co. Shares Outstanding
300,000
XYZ Co. Shares Outstanding
150,000


A. $400,000
B. $250,000
C. $300,000
D. $315,000 - ANSWER C. $300,000


Given the data in the above table, calculate equity value per share of this
hypothetical company. (Round to 2 decimal points)
Shares outstanding
150,000
Cash
120,000
Tax Rate
6%
Discount Rate
2%
Enterprise Value
300,000
Debt
90,000
Perpetual Growth Rate

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