REFERENCE: Ref.03_06 Kaye Company Acquired 100% of Fiore Company on January 1,2009.Kaye

question 107

Multiple Choice

REFERENCE: Ref.03_06
Kaye Company acquired 100% of Fiore Company on January 1,2009.Kaye paid $1,000 excess consideration over book value which is being amortized at $20 per year.Fiore reported net income of $400 in 2009 and paid dividends of $100.
-Hoyt Corporation agreed to the following terms in order to acquire the net assets of Brown Company on January 1,2009:
(1) ) To issue 400 shares of common stock ($10 par) with a fair value of $45 per share.
(2) ) To assume Brown's liabilities which have a fair value of $1,500.
On the date of acquisition,the consideration transferred for Hoyt's acquisition of Brown would be

• A)$18,000.
• B)$16,500.
• C)$20,000.
• D)$18,500.
• E)$19,500.

Apply the concept of WACC in investment decision-making processes.

Interpret the effect of taxes on the cost of capital.

Calculate the growth rate of dividends and understand its impact on the cost of equity.

Understand the principles of reinforcement in operant conditioning.

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