Net Assets and EPS
I had an interview with a small advisory dep. The question was:
Company A acquires Company B with discount to its net assets. How does the acquisition impact consolidated BS and EPS. What changes if it was acquired with premium?
Can someone help me answer this?
I understand that if company B purchased with premium then the goodwill should be recorded on asset side of BS. In case of a discount, I guess we could add some extra amortization. Not sure how both cases impact EPS.