Hard Technical Question

I knowBIWS' 400 questions like the back of my hand, but I keep getting asked these hard questions which I don't know how to answer. What level of finance even is this?


Company A

Company B

Company C - 1,000 million value


Company A owns 60% of Company C

Company B owns 40% of Company C


Company A want to increase its share from 60% to 75% by buy buying shares from Company B.

C公司将筹集债务。

How much debt does Company C have to raise for Company A to increase its share from 60% to 75%?

Comments (8)

6mo
jordan_6, what's your opinion? Comment below:

Maybe this is how it works-

B公司保持400单位

Company A wants 75% or 3/4 ownership

400 is 25% of what number.

6mo
luckyaces, what's your opinion? Comment below:

Couldn't be. First off, OP says A wants to increase ownership by buying shares from B. Second, raising the debt wouldn't directly impact equity ownership of C, so finding 1600 (.25 of it is 400) will give us ourEVand thus, once again, won't alter equity ownership.

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6mo
Anonymous Monkey, what's your opinion? Comment below:

The question you wrote is nonsense; you recalled it incorrectly

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6mo
CovenantHeadroom, what's your opinion? Comment below:

C is debt financing a sharebuybackfrom B. Assuming for a second it's possible to do so (normally you have to buy back all shareholders pro-rata but let's say A is ok with it) then if $1,000 is the权益价值在C中,C筹集了200美元,并从B中购买了200股(假设1,000个NOSH,每股价值为1)。因此,B有400股,现在有200股,仍然拥有600股,总共有800股,因此现在拥有75%的股权。仅检查它的工作原理,假设C筹集了400美元来回购B的全部B,那么A最终拥有该公司的100%(但是现在有400美元的债务:尽管看起来像是这样,但它并不是DCFof the new company will be lower hence share price should trade down).

6mo
Jacob Moore - Trader at KZI, what's your opinion? Comment below:

Thank you for your response.This is assuming Company C is buying back shares from Company B, but what if Company A is simply buying shares from Company B?

这是我的思考过程:

公司C C之间的债务比例划分ompany A and Company B based on % ownership.

Company C has to raise a total of 250

A公司获得150债(250个债务中的60%)

Company B gets 100 debt (40% of 250)

Company A now has 150 to buy shares from Company B, which would increase Company A's shares from 600 to 750 (75%).

公司A的债务+150

Company B's debt +100

请给出意见。

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6mo
CovenantHeadroom, what's your opinion? Comment below:

What does it mean to "proportionally split debt"? There must be a 3rd party lender coming in for the 250m. I think what you mean is C raises 250m debt and distributes the proceeds as dividend to both A and B pro-rata (150m/100m) (ie C does a divi recap). Instead of pocketing the 150m, A used the 150m to buy shares from B therefore ultimately owning 75% of C (which now has 250m of debt though, so A owns 75%*(1,000m-250m)=56m vs 60m before).

6mo
Jacob Moore - Trader at KZI, what's your opinion? Comment below:

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