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Chapter 5: Q.8 (page 648)
How is goodwill now treated in a merger?
Goodwill is recorded as the intangible asset in the balance sheet of the purchasing company.
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An investor in the United States bought one-year Brazilian security valued at 195,000 Brazilian reals. The U.S. dollar equivalent was 100,000. The Brazilian security earned 16 percent during the year, but the Brazilian real depreciated 5 cents against the U.S. dollar during the period (\(0.51 to \)0.46). after transferring the funds back to the United States, what was the investor’s return on her \(100,000? Determine the total ending value of the Brazilian investment in Brazilian reals and then translate this Brazilian value to U.S. dollars. Then compute the return on the \)100,000.
What is the difference between a merger and a consolidation?
What is synergy? What might cause this result? Is there a tendency for management to over- or underestimate the potential synergistic benefits of a merger?
What is LIBOR? How does it compare to the U.S. prime rate?
Suggest some ways in which firms have tried to avoid being part of a target takeover
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