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?

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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

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