Answer To: This is a merger and acquisition case study. Problems 1-4 need to be completed on pages 109 and 110....
Robert answered on Dec 26 2021
Answer to Question 1.
Part a)
Number of Shares outstanding for National 113640000
Shares to be bought by A-1 (95%)
[113640000*95%] 107958000
Consideration per share $ 55.00
Total Consideration paid / Cash needed
$5,93,76,90,000.00
Part b)
Total Cash needed $ 5,93,76,90,000.00
Less: Liquid Assets of National $ 1,15,30,00,000.00
Funds to be borrowed $ 4,78,46,90,000.00
Part c)
Present Debt of A-1 $ 1,89,95,00,000.00
Add: Present Debt of National $ 2,11,03,00,000.00
Add: Borrowed Funds for takeover $ 4,78,46,90,000.00
Total Debt of combined firms $ 8,79,44,90,000.00
Total Debt of combined firms $ 8,79,44,90,000.00
Total Equity [61800000 * 6.39] $ 39,49,02,000.00
Debt-to-equity ratio 22.27
With the Debt Equity ratio that the company has, the company won’t be given debt finance by any
financial institution.
Part d)
Raised Funds for takeover $ 4,78,46,90,000.00
/ Issue Price per share $ 13.00
Number of shares issued 368053077
Part e)
Existing Equity shares- A-1 61800000
Add: Number of shares issued 368053077
Total Equity shares 429853077
Total...