Analyze the capital structure of American Airlines after its 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 billion Equity $2,938 billion Stock outstanding 90.5 million shares Price per share $89.07

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

PLEASE SHOW EXCEL FORMULA

A B C D American Airlines Purchase of USAir - Capital Structure 1 2 (in MS) Equity Debt Capital Debt/Capital 3 USAir 4 American Airlines Pro Forma Effect of All Cash Cash/Stock 6 7 American Debt 8 USAir Debt 9 Acquisition Cost Debt 10 minus USAir cash 11 minus American cash 12 Total Debt (net of cash) 13 Existing American equity 14 New American equity 15 Total Capital 16 Debt to Capital 17 USAir stock price 18 #of USAir shares (M) A B C D American Airlines Purchase of USAir - Capital Structure 1 2 (in MS) Equity Debt Capital Debt/Capital 3 USAir 4 American Airlines Pro Forma Effect of All Cash Cash/Stock 6 7 American Debt 8 USAir Debt 9 Acquisition Cost Debt 10 minus USAir cash 11 minus American cash 12 Total Debt (net of cash) 13 Existing American equity 14 New American equity 15 Total Capital 16 Debt to Capital 17 USAir stock price 18 #of USAir shares (M)