JC Penny and it's acquisition of kohl's.
Identify and evaluate sources of debt financing.
Identify and evaluate sources of equity financing.
Compute cost of debt financing.
Compute cost of equity financing.
Determine optimal target capital structure.
Calculate weighted average cost of capital (parent company).
Determine how the parent company will pay for the target acquisition company.
Develop a strategic growth plan and explain how this acquisition supports the plan.
The course project for week 6 includes a summary of financial analysis with exhibits. Specifically, you will be preparing a summary of performance tests to determine how the acquiring company will pay for the acquisition. The amount should be in a range. All of these tests will be applied to the company being acquired. Therefore, my recommended format for this paper is a good introduction of the topic, a summary of the performance tests, a paragraph discussing the recommended range of price to pay for the company and a strong conclusion. Keep all of the details of the calculations out of the main paper and the details either in illustrations or in an appendix. Also, do not discuss the definitions or formulas for any of the calculations. Formulas may be included with your calculation details. As always include a cover page and a reference page.
Answer will be sent by email as attachment.
