Problems #1 When does the IRS consider a transaction to be non-taxable to the target firm’s shareholders? is the justification for the IRS’ position? Problem #2 is goodwill and how

Problems #1 When does the IRS consider a transaction to be non-taxable to the target firm’s shareholders? is the justification for the IRS’ position? Problem #2 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. is the current Equity Value of CLU? is the current Enterprise Value of CLU? How many shares of CLU, Inc. are outstanding on an as-converted basis?

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