In the problem it says the excess over book value is allocated to undervalued assets and goodwill. Here is how I calculated the excess:
Implied FV =260k/80%= 325,000
BV (130k+120k)=250,000
Excess= 75,000
The difference between PPE mkt and book is 95,000 overvalued.
My question is:
1) Did I calculate the excess correctly?
2) Why is the PPE excess larger than the total excess and where is the goodwill?
Attachments:
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