[SOLVED] Managerial Finance – M&A and IPOs

I’m stuck on a Business question and need an explanation.

Documents and notes attached for reference. I only need question number one answered.

Question 1 – M&A Blended Offer

Sprint is planning on acquiring Nextel. The situation for both firms before the transaction is as outlined below:

Sprint before the transaction:

• ? 1,400 million shares outstanding at a market price of $25 per share
• ? Market value of debt is $5,000 million
• ? No excess cashNextel before the transaction:

• ? 1,030 million shares outstanding at a market price of $30 per share
• ? Market value of debt is $5,000 million
• ? No excess cashTransaction details:

• ? Sprint will pay $2 per share of Nextel and will also exchange each share of Nextel for 1.1661 sharesof Sprint
• ? Sprint will finance the cash component of the offer by taking on an acquisition loan
• ? Sprint will assume the outstanding debt of Nextel
• ? Synergies from the acquisition will be $12,000 million (including any tax shields from theacquisition loan)

1. A) What is the enterprise value of Sprint after its acquisition of Nextel (??????????????+????????????)?
2. B) What is the market value of equity of Sprint after its acquisition of Nextel (??????????????+????????????)?
3. C) What is the share price of Sprint after its acquisition of Nextel (??????????????+????????????)?
4. D) What is the Price Paid by Sprint for the acquisition of Nextel?
5. E) How much value did Sprint create for its shareholders through the acquisition?