Reference no: EM132555042
Company ABC (bidder) just completed a M&A project and the target was Company XYZ. This project was an all cash deal. Prior to M&A, Company XYZ had L-T-D outstanding of $ 450.
The balance sheet for Company ABC prior to M&A was given below:
CA$ 100. CL$ 60FA$ 1,200
L-T-D$ 550. TA$ 1,300
Equity$ 690
TL + TE$ 1,300
The balance sheet for Company ABCXYZ post M&A was given below:
CA$ 140. CL$ 85
FA$ 1,950. L-T-D$ 1,285
Goodwill$ 150. Equity$ 870
TA$ 2,240. TL + TE$ 2,240
What was the total cost to Company ABC to consummate this deal?
a$ 940
b$ 960
c$ 840
d$ 860
e$ 760
How much additional L-T-D must be issued to finance this project?
a$ 275
b$ 285
c$ 365
d$ 305
e$ 265