Question

How do you find the common stock value if it's not given in an acquisition of...

How do you find the common stock value if it's not given in an acquisition of company stock problem?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Generally in the acquisition of the company problem the vlue of common stock is given but if the value of common stock is not given then the fair value of net assets will be the value of common stock. It means we calculate the fair value of asset plus the value of goodwill if any and from that if we deduct all the liabilties then the net assets value will be arrived and it will be the value of common stock. Hence to find out common stock value we calcualte fair value of assets and from that fair value of liabilities are deducted to arrive at the value of common stock

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How do you find the Investment in a Subsidiary two years after acquisition, given the following...
How do you find the Investment in a Subsidiary two years after acquisition, given the following info (can you please give an explanation): Peter Co acquired 90% of Sam Co. for $2,700,000 on Dec 31, 2015. At the date of acquisition, Sam Co. had capital stock of $2,000,000 and retained earnings of $500,000. All of Sam's assets and liabilities were recorded at fair values when Peter acquired its interest. The excess over book value is due to previously unrecorded patents...
How do you value a stock? Is subtracting liabilities from assets a good way to find...
How do you value a stock? Is subtracting liabilities from assets a good way to find value of stock of a company?
how do you find expected value if given a fraction or fractions
how do you find expected value if given a fraction or fractions
how do you find expected value if given a fraction or fractions
how do you find expected value if given a fraction or fractions
How do you depreciate preferred stock under MACRS method? In this case it's a corporation that...
How do you depreciate preferred stock under MACRS method? In this case it's a corporation that owns stock in another corporation.
how do you find the p-value of number of observations isn't given?
how do you find the p-value of number of observations isn't given?
How do you find the X value that corresponds to a given percentile of the normal...
How do you find the X value that corresponds to a given percentile of the normal distribution?
A company's common stock is currently selling at $40 per share. It's most recent divided was...
A company's common stock is currently selling at $40 per share. It's most recent divided was $1.60, and the financial community expects that it's dividend will grow at 10% per year in the foreseeable future. What is the company's equity cost of retained earnings? If the company sells new common stock to finance new projects and most pay $2 per share in flotation costs, what is the cost of equity?
how do you find the critical value for a=0.05, two-tails i have the answer. i need...
how do you find the critical value for a=0.05, two-tails i have the answer. i need to learn how to do problem.
Prime Company acquired 75% of the common stock of Second Company January 1, year one, for...
Prime Company acquired 75% of the common stock of Second Company January 1, year one, for $450,000 The consideration given was proportional to Second's fair value. On that date, Second had the following trial balance: account debit credit Additional paid in capital $100,000 Building (12-year life) $250,000 Common stock 170,000 Current assets 170,000 Equipment (6-yr life) 160,000 Land 110,000 Liabilities (due in 4 years) 300,000 Retained earnings 1/year 1 120,000 Totals $690,000 $690,000 During year one, Second reported net income...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT