Chapter 29
Input Area:
Cash paid 282,000,000$
2019 2020 2021 2022 2023
Sales 409,600,000$ 460,800,000$ 512,000,000$ 576,000,000$ 640,000,000$
Production costs 287,400,000 322,500,000 358,400,000 404,500,000 451,200,000
Depreciation 38,400,000 40,900,000 42,300,000 42,500,000 43,900,000
Other expenses 40,900,000 46,100,000 51,200,000 57,900,000 63,100,000
Investments
Net working capital 10,200,000$ 12,800,000$ 12,800,000$ 15,400,000$ 15,400,000$
Fixed assets 7,700,000 13,800,000 9,300,000 31,400,000 3,900,000
Sources of financing
New debt 17,900,000$ 9,200,000$ 8,200,000$ 15,000,000$ 6,100,000$
Debt level in five years 153,600,000$
Stock price of acquirer 94.00$
Shares outstanding in acquirer 11,600,000
Shares outstanding in target 5,200,000
Risk-free rate 6%
The Birdie Golf-Hybrid Golf Merger
Current debt weight 0.33
New debt weight 0.50
New equity weight 0.50
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Acquisition of Hybrid (282,000,000)$
Dividends from Hybrid 76,000,000$ 24,877,500$ 12,630,000$ 21,950,000$ 11,925,000$ 37,800,000$
Terminal value of equity 253,075,864
Terminal value of debt (104,537,579)
Total (206,000,000)$ 21,238,617$ 20,179,330$ 23,819,239$ 6,334,851$ 165,681,382$