On december 8 2000 general mills announced to acquire the

Assignment Help Financial Accounting
Reference no: EM13376142

On December 8. 2000, General Mills announced to acquire the worldwide business of Pillsbury from Diageo PLC. General Mills issued 141 million shares of its common stock to Diageo shareholders. There was following contingent payment by Diageo to General Mills. "At the closing, Diageo would establish an escrow fund of $642 mil. Upon the first anniversary date of the closing, Diageo was required to pay from this fund an amount to General Mills depending on General Mills' share price.

• $642Mil, if the average daily share price for 20 days was $42.55 or more

• $0.45 mil, if the average daily share price were $38 or less.

• Variable amount, if the average daily share price were between $38 and $42.55. Diageo would retain the amount by which $42.55 would exceed the average daily share price for 20days, times the amount of General Mill shares held by Diageo (141 million shares).

a. Draw the diagram for this claw-back provision.

b. What kind of option is it?

Reference no: EM13376142

Questions Cloud

You decide to prepare a specific list of requirements for : you decide to prepare a specific list of requirements for the ceo so that if she agrees to overhaul the existing
Irons delivery inc purchased a new delivery truck for 42000 : irons delivery inc. purchased a new delivery truck for 42000 on january 1 2009. the truck is expected to have a 2000
Algers company produces dry fertilizer at the beginning of : algers company produces dry fertilizer. at the beginning of the year algers had the following standard cost sheetdirect
State responsibility and environmental regulationecks : state responsibility and environmental regulationecks company was incorporated in state x but has its headquarters
On december 8 2000 general mills announced to acquire the : on december 8. 2000 general mills announced to acquire the worldwide business of pillsbury from diageo plc. general
A companys current net operating income is 16800 and its : a companys current net operating income is 16800 and its average operating assets are 80000. the companys required rate
Mary white dialysis clinic is an independent : mary white dialysis clinic is an independent non-profit-service renal dialysis clinic. the clinic provides two types of
Milton and rhodes perform consulting services for : milton and rhodes perform consulting services for e-commerce consulting and information systems in western australia.
The french pastry company makes a range of delicious cakes : the french pastry company makes a range of delicious cakes and pastries. their website shows the following information

Reviews

Write a Review

Financial Accounting Questions & Answers

  Analyze the budget variance by calculating the direct labor

Analyze the budget variance by calculating the direct labor efficiency and rate variances for June. What alternatives to the preceding monthly report could improve control over the stamping departments direct labor?

  What price would have been charged to the customer if job

What price would have been charged to the customer if the job required $3,3000 in materials and $4,5000 in direct labor cost, and the company priced its jobs at 20% above the job’s cost according to the accounting system?

  Compute the cost of goods available for sale

Compute the cost of the ending inventory and the cost of goods sold under: Average Cost Ending inventory. Average Cost Cost of goods sold. Which costing method gives the highest ending inventory?

  What is the residual income of the project

The company is investigating an investment of $400,000 in project that will generate annual net operating income of $78,000. What is the return on investment of the project? What is the residual income of the project? Should the company invest in ..

  You have to read the report understanding its purpose and

you have to read the report understanding its purpose and then discuss why individual has different way of choosing

  Determine the net present value of the project

Determine the net present value of the project

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  How rapidly the market believes the company will grow

the overall efficiency with which the company uses its assets to generate revenues. how rapidly the market believes the company will grow.

  Statement of cash flows prepared by the indirect technique

In a statement of cash flows prepared by the indirect technique, which of the subsequent events would be deducted from net income? In a statement of cash flows, which of the subsequent events would be classified as a financing activity?

  Which of the subsequent groups constitute a controlled

which of the subsequent groups constitute a controlled group? any stock not listed below is held by unrelated

  Findingnbsp the write off of the specific receivablethe

findingnbsp the write off of the specific receivable.the draber company uses the allowance method based on the aging

  What is the fair-value option for reporting equity method

What is the fair-value option for reporting the equity method investments? Please explain procedures that should be used when changing from the fair value method to the equity method?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd