In addition to the $150 million purchase price for Kappa’s equity, $4.5 million will be used to repay Kappa’s existing debt. • With $5 million in transaction fees, the acquisition will require $159.5 million in total funds. • The Blackstone Group’s sources of funds include the new loan of $100 million as well as $ 6.5 million Kappa’s own excess cash (which The Blackstone Group will have access to). • Thus The Blackstone Group’s required equity contribution to the transaction is $53 million. • Exercise 15: how do you get $53 million?
In addition to the $150 million purchase price for Kappa’s equity, $4.5 million will be used to repay Kappa’s existing debt. • With $5 million in transaction fees, the acquisition will require $159.5 million in total funds. • The Blackstone Group’s sources of funds include the new loan of $100 million as well as $ 6.5 million Kappa’s own excess cash (which The Blackstone Group will have access to). • Thus The Blackstone Group’s required equity contribution to the transaction is $53 million. • Exercise 15: how do you get $53 million?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question 15:
• In addition to the $150 million purchase price for Kappa’s equity, $4.5 million will be used to repay Kappa’s existing debt.
• With $5 million in transaction fees, the acquisition will require $159.5 million in total funds.
• The Blackstone Group’s sources of funds include the new loan of $100 million as well as $ 6.5 million Kappa’s own excess cash (which The Blackstone Group will have access to).
• Thus The Blackstone Group’s required equity contribution to the transaction is $53 million.
• Exercise 15: how do you get $53 million?
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