The Birdie Golf Hybrid Golf Merger
The Birdie Golf Hybrid Golf Merger
The Birdie Golf Hybrid Golf Merger
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,
Assignment Questions
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.
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