a​) a best efforts arrangement whereby Astro will keep 2.4% of the retail sales or ​(b​) a firm commitment arrangement of ​$10,100,000. Lunar plans on offering 1,000,000 shares at ​$11.36 per share to the public. If it sells 100% of the​ shares, which is the better choice for

Hastings Corporation is interested in acquiring Vandell Corporation. Vandell currently has 1 million shares outstanding and a target capital structure consisting of 30% debt; its current beta is 1.60 (i.e., based on its target capital structure). Vandell's debt interest rate is 7.8%. Assume that the risk-free rate of interest is 3% and the market risk premium is 8%. Both Vandell and Hastings face a 35% tax rate. Hastings Corporation estimates that if it acquires Vandell Corporation, synergies will cause Vandell's free cash flows to be $2.5 million, $3.0 million, $3.5 million, and $3.85 million at Years 1 through 4, respectively, after which the free cash flows will grow at a constant 5% rate. Hastings plans to assume Vandell's $10.31 million in debt (which has a 7.8% interest rate) and raise additional debt financing at the time of the acquisition. Hastings estimates that interest payments will be $1.5 million each year for Years 1, 2, and 3. After Year 3, a target capital structure of…

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A company has EBITDA of $100m. If a private equity fund acquires this company in a Leveraged Buy-Out for an EBITDA multiple of 3x, borrowing 50% of the purchase price, and sells the company for a multiple of 5x when the company's EBIDTA has increased to $150m, what will be the value of the equity investment in the company upon exit? What is it as a multiple of the initial equity investment? 8)