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In November of 1 9 8 8 , KKR , an investment firm, won a bidding war to buy all of the shares ( 2
In November of KKR an investment firm, won a bidding war to buy all of the shares million of RJR Nabisco for $ per share. RJR shares had been trading for $ prior to the buyout. The purchase was debt financed $ billion The new debt was added to the $ billion of debt that predated the buyout. The new debt resulted in a debttovalue ratio of which RJR was committed to maintaining in perpetuity. Analysts expected RJR to generate free cash flow of $ billion at the end of Assume that cash flows occur on December and today is January Analysts expected RJRs cash flow to grow at in perpetuity. RJRs cost of debt was and its cost of unlevered equity was The tax rate was What was the value of KKRs equity in the company after the buyout on January Express your answer in billions of dollars rounded to one decimal place.
In November of KKR an investment firm, won a bidding war to buy all of the shares million of RJR Nabisco for $ per share. RJR shares had been trading for $ prior to the buyout. The purchase was debt financed $ billion The new debt was added to the $ billion of debt that predated the buyout. The new debt resulted in a debttovalue ratio of which RJR was committed to maintaining in perpetuity. Analysts expected RJR to generate free cash flow of $ billion at the end of Assume that cash flows occur on December and today is January Analysts expected RJRs cash flow to grow at in perpetuity. RJRs cost of debt was and its cost of unlevered equity was The tax rate was
What was the value of KKRs equity in the company after the buyout on January Express your answer in billions of dollars rounded to one decimal place.
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