Target company T has a book value equal to $100mm and has outstanding debt. Acquirer A uses cash from its balance sheet and borrows funds to pay $125mm for all of T's shares. This creates Goodwill on A's balance sheet equal to:

a) $100mm
b) $25mm
c) $125mm
d) Depends on how much of T's debt A assumed
e) Depends on the excess of A's market value over its book value prior to the acquisition

Answer: b) $25mm