1
MERGERS & ACQUISITIONS (M &A ) MODELLING
QUESTIONS AND ANSWERS 2024/2025 GRADED A+
What is the correct formula for Goodwill?
A. Market value of acquirer - net identifiable assets of target
B. Price paid - fair market value of net identifiable assets of target
C. Market value of acquirer - fair market value of target
D. Book value of target's equity + Adjustments - (answers)B. Price paid - fair
market value of net identifiable assets of target
ABC Co. is considering an acquisition of XYZ Co. for a cash offer that values XYZ at
20% higher than its current market capitalization. Given the above data, calculate
the takeover premium in dollar terms (Round to the closest dollar).
ABC Co. Stock Price
$26.00
XYZ Co. Stock Price
$10.00
ABC Co. Cash
$2,000,000
XYZ Co. Cash
$1,500,000
ABC Co. Shares Outstanding
300,000
, 2
XYZ Co. Shares Outstanding
150,000
A. $400,000
B. $250,000
C. $300,000
D. $315,000 - (answers)C. $300,000
Given the data in the above table, calculate equity value per share of this
hypothetical company. (Round to 2 decimal points)
Shares outstanding
150,000
Cash
120,000
Tax Rate
6%
Discount Rate
2%
Enterprise Value
300,000
Debt
90,000
MERGERS & ACQUISITIONS (M &A ) MODELLING
QUESTIONS AND ANSWERS 2024/2025 GRADED A+
What is the correct formula for Goodwill?
A. Market value of acquirer - net identifiable assets of target
B. Price paid - fair market value of net identifiable assets of target
C. Market value of acquirer - fair market value of target
D. Book value of target's equity + Adjustments - (answers)B. Price paid - fair
market value of net identifiable assets of target
ABC Co. is considering an acquisition of XYZ Co. for a cash offer that values XYZ at
20% higher than its current market capitalization. Given the above data, calculate
the takeover premium in dollar terms (Round to the closest dollar).
ABC Co. Stock Price
$26.00
XYZ Co. Stock Price
$10.00
ABC Co. Cash
$2,000,000
XYZ Co. Cash
$1,500,000
ABC Co. Shares Outstanding
300,000
, 2
XYZ Co. Shares Outstanding
150,000
A. $400,000
B. $250,000
C. $300,000
D. $315,000 - (answers)C. $300,000
Given the data in the above table, calculate equity value per share of this
hypothetical company. (Round to 2 decimal points)
Shares outstanding
150,000
Cash
120,000
Tax Rate
6%
Discount Rate
2%
Enterprise Value
300,000
Debt
90,000