please answer a, b, c, d, and e.

this is one question.

Disney Acquisition of Marvel Entertainment In August 2009, The Walt Disney Company announced that it would acquire Marvel Entertainment, Inc., in a \$4 billion cash and common stock deal. On a per-share basis, the consideration given by Disney to Marvel shareholders represents a 29% premium over Marvel's share price at the date of acquisition. Disney acquires the more than 5,000 characters in Marvel's library, including Iron Man, Spider-Man, X-Men, Captain America, and the Fantastic Four. Exhibit 8.35 presents the condensed consolidated balance sheet of Marvel at the end of its June 30 , 2009, second quarter. REQUIRED a. From a strategic perspective, discuss why you believe Disney would make this acquisition. Note: If you are not familiar with this acquisition, search online for articles relating to the acquisition to help you formulate your answer. b. Assuming that the assets and liabilities of Marvel approximate their individual fair values at the date of acquisition, compute goodwill. Exhibit 8.35 Exhibit 8.35 (Continued) Marvel Entertainment, Inc. stockholders' equity: Preferred stock, 5.01 par value, 100,000,000 shares authorized, none issued Common stock, $.01 par value, 250,000,000 shares authorized, 134,681,030 issued and 77,997,619 outstanding in 2009 and 134,397,258 issued and 78,408,082 outstanding in 2008 Additional paid-in capital Retained eamings Accumulated other comprehensive loss Total Marvel Entertainment, Inc. stockholders' equity before treasury stock Treasury stock, at cost, 56,683,411 shares in 2009 and 55,989,176 shares in 2008 Noncontrolling interest in consolidated Joint Venture. Total equity Total liabilities and equity Sourct, Marvel Entertainment, inc. Quarterly Reports, June 30, 2009, and December 31, 2008. c. This is a 100% acquisition. What role does the 29% premium play in the computation of goodwill? If this were a less-than-100\% acquisition, how would the 29% premium affect the computation of the noncontrolling interest? d. Disney will record a decrease in its cash and an increase in its shareholders' equity totaling $4 billion at the date of acquisition. Contrast the rest of the financial statement effects on Disney's own records and on its consolidated balance sheet between two scenarios: Marvel is dissolved (a merger) and Marvel continues to exist as a separate legal entity (an acquisition). e. It is unlikely that the assets and liabilities of Marvel as shown in the condensed quarterly balance sheet approximate their individual fair values at the date of acquisition. Indeed, some of Marvel's most valuable resources might not be recognized on their balance sheet. As a result, the entire excess acquisition price is not likely to be assigned to goodwill. Identify items that are likely to receive a portion of the allocation based on the differences between their book values and fair values. Disney Acquisition of Marvel Entertainment In August 2009, The Walt Disney Company announced that it would acquire Marvel Entertainment, Inc., in a \$4 billion cash and common stock deal. On a per-share basis, the consideration given by Disney to Marvel shareholders represents a 29% premium over Marvel's share price at the date of acquisition. Disney acquires the more than 5,000 characters in Marvel's library, including Iron Man, Spider-Man, X-Men, Captain America, and the Fantastic Four. Exhibit 8.35 presents the condensed consolidated balance sheet of Marvel at the end of its June 30 , 2009, second quarter. REQUIRED a. From a strategic perspective, discuss why you believe Disney would make this acquisition. Note: If you are not familiar with this acquisition, search online for articles relating to the acquisition to help you formulate your answer. b. Assuming that the assets and liabilities of Marvel approximate their individual fair values at the date of acquisition, compute goodwill. Exhibit 8.35 Exhibit 8.35 (Continued) Marvel Entertainment, Inc. stockholders' equity: Preferred stock, 5.01 par value, 100,000,000 shares authorized, none issued Common stock, $.01 par value, 250,000,000 shares authorized, 134,681,030 issued and 77,997,619 outstanding in 2009 and 134,397,258 issued and 78,408,082 outstanding in 2008 Additional paid-in capital Retained eamings Accumulated other comprehensive loss Total Marvel Entertainment, Inc. stockholders' equity before treasury stock Treasury stock, at cost, 56,683,411 shares in 2009 and 55,989,176 shares in 2008 Noncontrolling interest in consolidated Joint Venture. Total equity Total liabilities and equity Sourct, Marvel Entertainment, inc. Quarterly Reports, June 30, 2009, and December 31, 2008. c. This is a 100% acquisition. What role does the 29% premium play in the computation of goodwill? If this were a less-than-100\% acquisition, how would the 29% premium affect the computation of the noncontrolling interest? d. Disney will record a decrease in its cash and an increase in its shareholders' equity totaling $4 billion at the date of acquisition. Contrast the rest of the financial statement effects on Disney's own records and on its consolidated balance sheet between two scenarios: Marvel is dissolved (a merger) and Marvel continues to exist as a separate legal entity (an acquisition). e. It is unlikely that the assets and liabilities of Marvel as shown in the condensed quarterly balance sheet approximate their individual fair values at the date of acquisition. Indeed, some of Marvel's most valuable resources might not be recognized on their balance sheet. As a result, the entire excess acquisition price is not likely to be assigned to goodwill. Identify items that are likely to receive a portion of the allocation based on the differences between their book values and fair values