Ellon Musk offered $46.5 billion to buy Twitter and take it private. Twitters book value is around $7.3 billion. Suppose the bid was successful and Mr. Musk buys Tesla (for $46.5 billion), and immediately changes its name Truth Musk.

a)Why do you think Mr. Musk is offering much more than Twitters book value?

b)What will be the book value of Truth Musk just after the take-over?

c)How will the balance sheets of Truth Musk and Twitter differ (just after the take-over)?

d)Suppose one month later, and with no changes in Truth Musk balance sheet, and amid concerns of competition from the newly launched Truth Social network, Mr. Musk decided to sell Truth Musk to another billionaire for $40 billion. The billionaire will call the company Twitter 2.0. What will be the book value of Twitter 2.0?