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ACCT2542 - BHP Total equity(millions Less cost of goodwill...

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BHP 2005 2006 2007 2008 2009 Total equity (millions) 24046 32901 35252 40560 50174 Less : cost of goodwill and IIA purchased (millions) 672 919 725 649 815 Net tangible assets (millions) 23374 31982 34527 39911 49359 MARKET CAPITALIZATION STATEMENT Weighted average of issued ordinary shares (millions) 6124 6035 5846 5590 5565 Share price (at reporting date) 30th June 200X [$] 18.15 29 35.05 43.7 34.72 Market Capitalization (millions) 111150.6 175015 204902.3 244283 193216.8 Total IIA (millions) 0 149.33 127.25 190.11 324.13 Goodwill (millions) 87776.6 142883.67 170248.05 204181.89 143533.67 Total Intangible Assets (millions) 87776.6 143033 170375.3 204372 143857.8 Net tangible assets (millions) 23374 31982 34527 39911 49359 Market Capitalisation (millions) 111150.6 175015 204902.3 244283 193216.8 Analysis of Market Capitalisation IIAs 0% 0.09% 0.06% 0.08% 0.16% Goodwill 78.97% 81.64% 83.09% 83.58% 74.29% Net Tangible Assets 21.03% 18.27% 16.85% 16.34% 25.55% Book Value of goodwill in the balance sheet (millions) 2005 2006 2007 2008 2009 671.7 769.5 597.4 459.2 490.5 (i) The actual fair value of the company, as judged by the market shows that a majority of assets within BHP is reflected in the market perspective for positive future growth. The goodwill reflected in BHP in it MCS indicates that the current financial statements are not able to reflect the true market capitalisation.
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(ii) The volatility of the goodwill in the MCS remains quite stable, and reflects current market sentiment towards the company, that is that BHP still retains strong market confidence in its performance. However a recent fall in the 2009 year parallels
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