Analyze the capital structure of American Airlinesafterits purchase of USAir.There are two scenarios: 1) an all cash purchase of USAir stock and 2) a 50% cash/50% stock purchase of USAir stock.Use the following assumptions.Show your answers in millions:

USAir: Cash $33 million Debt $2.094 billionEquity $2,938 billionStock outstanding90.5 million sharesPrice per share $89.07

American: Cash $515 million Debt $2,765 billionEquity$4.815 billion

A B C D E F G H American Airlines Purchase of USAir - Capital Structure J (in M$) Debt Equity Capital Debt/Capital USAir American Airlines Pro Forma Effect of All Cash Cash/Stock American Debt USAir Debt Acquisition Cost Debt mmus USAir cash minus American cash Total Debt (net of cash) Existing American equity New American equity Total Capital Debt to Capital USAir stock price # of USAir shares (M)