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  3. 4. 5. and 6. please !! 4. p company acquires.

4. 5. and 6. please !! 4. P Company acquires...

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Accounting

4. 5. and 6. please !!
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4. P Company acquires 80% of Company in an acquisition that results in $10 million of goodwill. P paid a premium to gain control of Company, and thus the fair value of its ownership interest is more than 4 times (80% vs. 20%) the fair value of the non-controlling interest [NCI]. With regard to the allocation of the goodwill a. The NCI will be allocated more than 2 million [20% of 10 million). b. The NCI will be allocated exactly 2 million [20% of 10 million) c. The NCI will be allocated less than 2 million [20% of 10 million Il The allocation amounts between P & the NCI will be negotiated 5. Which of the following is not a typical characteristics of special purpose entities (SPE's)? a. It is legally distinct from the sponsoring company and may be bankruptcy remote. b. It is generally allowed to engage in a highly restricted set of activities c. It is financed with a maximum amount of equity capital of 5% of total assets. d. None of the above 6. Which of the following financial instruments is not considered to be a derivative? a. Stock-index options b. US, treasury bills c. Interest-rate swaps d. Foreign currency futures 3+ DOT DH lo 190 & 3 C % 5 6 7 00 o 8 9

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