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

Answer:

The correct solution is "$241,356".

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:

⇒ $P=P0\times (1 + p)$

On putting the values, we get

⇒     $=140.50\times (1 + 20 \ percent)$

⇒     $=168.60$

The purchase consideration will be:

= $P\times N$

= $168.60\times 2,863$

= $482,702 \ MM$

So that,

The total equity financing expected will be:

= $Purchase \ consideration\times Percentage \ of \ equity \ financing$

= $482,702\times 50 \ percent$

= $241,351 \ MM$ ($)

Thus the above is the correct answer.