Question

What is the Total expected equity financing for Amazon’s purchase of Walmart, at the assumed 50-50% equity and debt financing deal mix provided

Answer 1

The correct solution is "$241,356".

Step-by-step explanation:

The given values are:

Share price,

P0 = 140.50

Acquisition premium,

p = 20%

Diluted shares outstanding,

N = 2,863 MM

Now,

For Amazon, the purchase price every share will be:

⇒
`P=P0* (1 + p)`

On putting the values, we get

⇒
`=140.50* (1 + 20 \ percent)`

⇒
`=168.60`

The purchase consideration will be:

=
`P* N`

=
`168.60* 2,863`

=
`482,702 \ MM`

So that,

The total equity financing expected will be:

=
`Purchase \ consideration* Percentage \ of \ equity \ financing`

=
`482,702* 50 \ percent`

=
`241,351 \ MM` ($)

Thus the above is the correct answer.