Step 2. Calculate Cost of Acquisition. The Cost of Acquisition consists of 2 components. Do you remember what they are?. Click on the mouse to check your answers below. Purchase Consideration Other Associated Costs. Step 2. Calculate Cost of Acquisition.
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Shareholders of Pizza Ltd receive 1 share for every 2 shares held.
There are 50,000 shares altogether and each share has a value of $2
Since $20,000 will be paid after 1 year, its fair value is equal to the present value, The discount rate (11%) is based on Burger Limiteds interest rate (see Loan in the Balance Sheet)