Assuming This Is a Stock Deal, Calculate the Goodwill Created

question 1

Multiple Choice

Assuming this is a stock deal, calculate the goodwill created in the M&A transaction given the following details.

Details:
Shareholders' equity: $5,000.0m
Existing goodwill: $1,500.0m
Equity purchase price: $6,600.0m
Tangible and intangible asset write-ups: $1,200.0m
Deferred tax liabilities: $800.0m

• A)$2,000.0m
• B)$1,500.0m
• C)$2,700.0m
• D)$3,200.0m

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Definitions:

Expiratory Reserve Volume (ERV)

The volume of air that can be forcefully exhaled after a normal tidal volume exhalation.

Inspiratory Reserve Volume (IRV)

The maximum amount of air that can be inhaled over the tidal volume, highlighting lung capacity beyond normal inhalation.

Residual Volume (RV)

The amount of air left in the lungs after a maximal exhalation, which cannot be voluntarily expelled.

Total Lung Capacity (TLC)

Refers to the maximum amount of air the lungs can hold after a maximum inhalation effort.