Please give me a detailed explanation in word document

Mr. Jon is not happy with the board of directors and their oversight of the company, especially the

performance of the CEO.Mr. Jon wants to construct a leverage buyout of the corporation.After speaking with investment bankers, they believe that the corporation could be levered at $12,000,000.

Mr. jon is sending notice to shareholders that he will purchase the shares of the company at $3 per share upon approval of the board of directors.The current stock price has fallen to a 52-week low of $1.75 per share because Wall Street analyst have given negative views of the stock.

1- What is the premium on offer to buy the stock?

2- If you were on the board would you approve the sale? (explain why)

3- Using the financial statements from week 7, do you believe the company is undervalued? (explain why)

3:Assuming that the stock will pay a future dividend of $.03 per share, based on the valuation formula (Price =Dividend/(expected return minus growth), is the offer fo

r $3 per share a fair offer?

4- What would you offer to take the company private

Jon Company Week # o Private Corporation Year 7 Balance Sheet Cash 14,630,515 Accounts Receivables 75,000 Inventory 798,000 Prepaid Rent 199,200 PPE 830,000 Accumulated Depreciation (510,000) Goodwill Total Assets 16,022,715 Accounts Payable 550,000 Accrued Expenses 325,000 Notes Payable - Long Term Bonds Payable 12,000,000 Total Liabilities 12,875,000 Partnership A Partnership B John Doe Capital 1.0 Mr. John Cash Capital Stock Holders Equity(par $1) 3,000,000 Additional Paid In Capital in excess of par 75,490 Change in Owners Equity 672,225 Retained Earnings Dividends Paid (Accumulated) (600,000) Stock Buy Backs Total Capital 3,147,715 Total Liabilities & Capital 16,022,715Jon Company Week # Private o Corporation Year 7 Income Statement Product Sales Revenue 1,643,880 Corporate Contract Income 206,000 Service Revenue 9,589,300 Total Revenue 11,439,180 Expenses Salary Expense 4,069,800 Cost of Goods Sold (Products) 1,302,336 Supplies Expense 162,792 Rent Expense 3,907,008 Administrative Costs 1,020,000 Bad Debt Expense Total Expenses 10,461,936 EBITDA 977,244 Depreciation Expense 162,000 Interest 720,000 EBT 95,244 Taxes 28,573 Net Income 66,671Jon Company Week # mal Private VI Corporation Year 7 Cash Flow Statement Changes in Operations Net Income 66,671 Depreciation 162,000 Changes in A/R (15,000) Changes in Inventory Changes in Prepaid Changes in A/P (620,000) Changes in Accrued Exp. Cash Flow from Operations (406,329) Changes in Investing Purchases of PPE Sales of PPE Cash Flow from Investing Changes in Financing Financing 10,000,000 Investments from Owners Distributions to Owners (9,000,000) Cash Flow from Financing 1,000,000 Total Change in Cash Flow 1 . . 593,671 Beginning Cash 14,036,844 Total Changes in Cash Flow 593,671 Ending Cash 14,630,515