The Birdie Golf-Hybrid Golf Merger
4 pages of double-spaced content with 1 reference in APA format by Corporate finance (10th ed.). Written in 2016. Word docx format including charts, tables, and calculations. Written by DBA candidate. 4.0 grade.
Birdie Golf, Inc., is trying to determine whether merging with Hybrid Golf Company is a feasible financial solution. The financial officer for Birdie has put together a financial statement, which includes the benefits of the possible merger. The management of Birdie Golf does not believe that Hybrid Golf has an optimal capital structure. In determining whether the merger is feasible, management is considering company leverage, share value, cost of capital, dividends, debt-to-equity ratios, tax loss carryforward, and future value.
Based on a provided table outlining the required investments and sources of financing, the Birdie Golf and Hybrid Golf merger mini case asks to analyze financial aspects of the potential merger. Questions the Birdie Golf company would like answered include: (a) should the merger proceed if Hybrid agrees to a merger price of $68.75 per share; (b) what is the highest price per share Birdie should pay for Hybrid; (c) what exchange ratio would satisfy the merger terms; and (d) what is the highest exchange ratio Birdie should pay.