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P co acquired 80% of equity stock in s co for a consideration of 3,000,000 equity in S co through a share exchange of 1 for 2 . And by cash of 6000 per share acquired payable at the end of month
At acquisition , the market value of Shares in p and s respectively was 4000 and 3780.
P co cost of capital is 7%
How can i get the cost of the investment?
Use market price of parent’s shares at acquisition date, plus cash consideration.
