Trans-World Airlines (TWA) is planning a leveraged buyout of Global Air Lines (GAL), and has secured the tentative support of GALs managers for its bid if TWA offers $81 per share for all 10 million outstanding shares of GAL stock. TWA wishes to structure the LBO financing package as one-third equity, two-thirds debt and believes that its bid will value GAL at 1.5 times the companys current enterprise value and at 9.0 times the airlines EBITDA. GAL currently has no debt.

a. How much debt and equity (fund capital) must TWA raise to complete this LBO?

b. What is GALs current stock price per share?

c. What is GALs current EBITDA?