Corporate Finance

Coca-Cola Corporation has acquired Pepsi-Cola in a merger transaction. The fixed Assets of Coca-Cola have a market value of 10 Billions, the market values for the other assets are the same as book values. The market value for Pepsi-Cola fixed assets is 400 Billions, the market values for the other assets are the same as book values. Assume that Coca-Cola issues 800 Billions in new long-term debt to finance the acquisition. The following balarice sheets represent the premerger book values. accounting purposes