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

Question

Quizplus · Accepted Answer

Goodwill created = Equity purchase price - Shareholders' equity - Existing goodwill - Tangible and intangible asset write-ups + Deferred tax liabilities
Goodwill created = $6,600.0m - $5,000.0m - $1,500.0m - $1,200.0m + $800.0m
Goodwill created = $2,700.0m

Therefore, the answer is C, $2,700.0m.

Assuming This Is a Stock Deal, Calculate the Goodwill Created