Answer:
Goodwill = 25,000
Explanation:
Goodwill is an intangible asset, is the differential reflected in a consolidated balance sheet immediately after the business combination between the purchase price of a company and the fair market value of identifiable assets and liabilities. Goodwill is recorded when the purchase price is higher than the sum of the fair value of all identifiable tangible and intangible assets purchased in the acquisition and the liabilities assumed in the process.
In this case:
Goodwill = Purchse Price - Net assets fair value
Goodwill = 340,000 - 315,000
Goodwill = 25,000
The difference between the book value and fair value of the acquired company are adjustments to the amount presented in the consolidated balance sheet.
0+625=625-275=350+350=700+200=900
hope this helps
Answer:
The cost of equity is 9.91%
Explanation:
The constant growth model of the DDM is used to calculate the price of the share or the fair value per share based on a constant growth in dividends and the required rate of return which is also known as cost of equity.
Plugging in the available values in the formual we can calculate the cost of equity or the required rate of return.
73.59 = 4.57 / (r - 0.037)
73.59 * (r - 0.037) = 4.57
73.59r - 2.72283 = 4.57
73.59r = 4.57 + 2.72283
r = 7.29283 / 73.59
r = 0.0991 or 9.91%
Answer:
low market growth, high relative market share
Explanation:
In 1970, Bruce D. Henderson created a certain growth-share matrix for the Boston Consulting group in which the cash cow was stated to be a company that operates in a slow-growing industry but with large market share.
Companies are known to love cash cows, reason being that they require minimal amount of money to maintain while the business on its own gives back much more money than one puts into it
Answer:
Growth rate is 6%
Explanation:
Po = 
P = 0.3 / (0.1 - 0.06)
P = $75
Dividend growth model is used to calculate the stock price based on the dividend growth.
