In 2006 clu inc a newly formed company issued 150000 ten

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Reference no: EM13385482

When does the IRS consider a transaction to be non-taxable to the target firm’s shareholders? What is the justification for the IRS’ position?
Problem #2
What is goodwill and how is it created?
Problem #3

In 2006, CLU Inc., a newly formed company, issued 150,000 ten year options exercisable into an equivalent number of common shares to you and other key members of management at an exercise price of $6.00. In 2014, CLU Inc.’s common shares are valued at $14.00 per share and the total number of common shares issued and outstanding total 1,000,000, and 150,000 options are outstanding. CLU Inc. has cash of $3,000,000 and a debt of $2,000,000.

What is the current Equity Value of CLU?
What is the current Enterprise Value of CLU?
How many shares of CLU, Inc. are outstanding on an as-converted basis?

Reference no: EM13385482

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