Raymond Tusk is a former private equity analyst turned entrepreneur. In 1980, Tusk acquired all outstanding...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Raymond Tusk is a former private equity analyst turned entrepreneur. In 1980, Tusk acquired all outstanding stock of Clayton West, which was at that time a small, failing power company. This 100% ownership of the company allowed him to remove the company from the stock market and make it a private company again, with him as the sole decision maker. Through successive rounds of capital raising and aggressive expansion over the years since then, Tusk has turned Clayton West into a global corporate juggernaut in the nuclear energy sector. The first outside capital that Clayton West sought after being taken over by Tusk was from some of Tusk's former private equity colleagues from Kravis Kohlberg Roberts (KKR) who believed in his vision for the firm. They agreed to pay a total of $152.0 million in order to have KKR acquire a 8.0% stake in the firm. After that, the next time that Clayton West accessed outside capital sources was when it received an investment of $1954.0 million from Xander Feng -a prominent Chinese telecom billionaire. Feng's investment bought him 27.0% ownership in Clayton West. Clayton West eventually underwent an initial public offering during the "Dot-Com" bubble in the late 1990s. Tusk realized that by floating some shares publicly under the name "ClaytonWest.com" they would be able to take advantage of investors' appetite for all things internet- related despite the fact that their core business was actually in nuclear power. ClaytonWest.com's IPO consisted of the underwriters raising a total of $5681.375 million from public investors. The underwriters took $198.850 million in fees from this total and then passed the remainder on to ClaytonWest.com. Although 105.700 million new ordinary shares were created and sold to the general public through this IPO, this was still a relatively small proportion of the company. The IPO allowed Tusk, his KKR friends, and Feng, to retain collective control of the other 85.0% of the ClaytonWest.com's shares. At the end of a very active first day of trading after the IPO, the shares in the firm closed at a price of $33.75/share. When answering the below questions, assume that there have been no other capital raisings by ClaytonWest.com beyond those described above. In addition, assume that each round of financing involved just the primary market creation of the new shares for the new investors with no changes to the stock holdings of the existing investors who owned stonks in the firm prior to that round of financing. Raymond Tusk is a former private equity analyst turned entrepreneur. In 1980, Tusk acquired all outstanding stock of Clayton West, which was at that time a small, failing power company. This 100% ownership of the company allowed him to remove the company from the stock market and make it a private company again, with him as the sole decision maker. Through successive rounds of capital raising and aggressive expansion over the years since then, Tusk has turned Clayton West into a global corporate juggernaut in the nuclear energy sector. The first outside capital that Clayton West sought after being taken over by Tusk was from some of Tusk's former private equity colleagues from Kravis Kohlberg Roberts (KKR) who believed in his vision for the firm. They agreed to pay a total of $152.0 million in order to have KKR acquire a 8.0% stake in the firm. After that, the next time that Clayton West accessed outside capital sources was when it received an investment of $1954.0 million from Xander Feng -a prominent Chinese telecom billionaire. Feng's investment bought him 27.0% ownership in Clayton West. Clayton West eventually underwent an initial public offering during the "Dot-Com" bubble in the late 1990s. Tusk realized that by floating some shares publicly under the name "ClaytonWest.com" they would be able to take advantage of investors' appetite for all things internet- related despite the fact that their core business was actually in nuclear power. ClaytonWest.com's IPO consisted of the underwriters raising a total of $5681.375 million from public investors. The underwriters took $198.850 million in fees from this total and then passed the remainder on to ClaytonWest.com. Although 105.700 million new ordinary shares were created and sold to the general public through this IPO, this was still a relatively small proportion of the company. The IPO allowed Tusk, his KKR friends, and Feng, to retain collective control of the other 85.0% of the ClaytonWest.com's shares. At the end of a very active first day of trading after the IPO, the shares in the firm closed at a price of $33.75/share. When answering the below questions, assume that there have been no other capital raisings by ClaytonWest.com beyond those described above. In addition, assume that each round of financing involved just the primary market creation of the new shares for the new investors with no changes to the stock holdings of the existing investors who owned stonks in the firm prior to that round of financing.
Expert Answer:
Answer rating: 100% (QA)
Let the number of shares initially owned by Raymond Tusk in Clayton West be x 1 KKR acquires 11 hold... View the full answer
Related Book For
Fundamentals of Advanced Accounting
ISBN: 978-0077667061
5th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2011, the companies had the...
-
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2013, the companies had the...
-
Akron, Inc., owns all outstanding stock of Toledo Corporation. Amortization expense of $15,000 per year for patented technology resulted from the original acquisition. For 2018, the companies had the...
-
For the Somerset furniture Company described in Case Problem 10.1 in Chapter 10, determine the product lead time by developing a time line from the initiation of a purchase order to product delivery....
-
In a few sentences, indicate how the bacterial endospore differs from the vegetative cell in structure, chemical composition, and ability to resist extreme environmental conditions.
-
An investigator wishes to estimate the proportion of students at a certain university who have violated the honor code. Having obtained a random sample of n students, she realizes that asking each,...
-
Gross Profit Percentage Calculate the company's 2019 gross profit percentage and compare the L04 result to the industry average. Use the following financial data for Brenner Instruments Sales...
-
Charu Khanna received a Form 1099-B showing the following stock transactions and basis during 2016: None of the stock is qualified small business stock. The stock basis was reported to the IRS....
-
6) everything is correct- just need help with the balance sheet now (it looks like a lot bit it's mostly done) please help Current Attempt in Progress Pronghorn Corporation was organized on January...
-
"Part 1: The Performance Lawn Equipment database contains data needed to develop a pro forma income statement. Dealers selling PLE products all receive 18% of sales revenue for their part of doing...
-
The comparative balance sheet for Golden Co. is shown below. Express the balance sheet in common-size percents. Cash. Accounts receivable. Golden Company Comparative Balance Sheets (in $000) December...
-
How can ethical theories such as utilitarianism, Kantian ethics, and virtue ethics be applied to complex moral dilemmas, such as those involving conflicting interests and competing moral values ?
-
Is the math in the chart correct? Rhonda runs a six-week summer camp in the North Georgia Mountains (three weeks in June and three weeks in July). Between 20 and 30 campers sign up for the summer,...
-
Solarcon ( Pty ) Ltd provides customers with air conditioners, including installation and maintenance. During the December 2 0 2 3 financial year - end, the board of directors held a meeting where it...
-
A small firm had revenues of $ 7 0 , 0 0 0 and expenses of $ 5 0 , 0 0 0 in the first quarter of 2 0 2 4 . There were no depreciation expenses. Its accounts receivable decreased from $ 2 0 , 0 0 0 to...
-
How do advances in digital communication technologies reshape the landscape of interpersonal relationships and social dynamics ?
-
A random sample of 15 items is drawn from a population whose standard deviation is unknown. The sample mean is x = 760 and the sample standard deviation is s = 20. Use Appendix D to find the values...
-
Explain the regulation of the secretions of the small intestine.
-
On December 1, 2013, Dresden Company (a U.S. company located in Albany, New York) purchases inventory from a foreign supplier for 60,000 local currency units (LCU). Dresden will pay in 90 days after...
-
Lancer, Inc., starts a subsidiary in a foreign country on January 1, 2012. The following account balances for the year ending December 31, 2013, are stated in kanquo (KQ), the local currency: Sales ....
-
On January 1, 2012, Allan acquires 15 percent of Bellevue's outstanding common stock for $62,000. Allan classifies the investment as an available-for-sale security and records any unrealized holding...
-
What is the comply or explain principle? How does it relate to conformity with corporate governance principles in the United States and in other countries around the world?
-
In February 2010, the U.S. Department of Justice and the UK Serious Fraud Office announced a settlement with Britains BAE Systems PLC to resolve a decade-long investigation into allegations that BAE...
-
Full IFRS and IFRS for SMEs do not permit recognition on the income statement of extraordinary items. What are the rules in the United States for extraordinary items? Evaluate the pros and cons of...
Study smarter with the SolutionInn App