Business: 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

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What is the Total expected equity financing for

Rakeem458

17.03.2022

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.

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