Perform tests to help determine how the acquiring company will pay for the acquisition. The focus of this deliverable is the acquiring company.
• Identify and evaluate sources of debt financing.
• Identify and evaluate sources of equity financing.
• Compute cost of debt financing.
• Compute cost of equity financing.
• Determine optimal target capital structure.
• Calculate weighted average cost of capital (parent company).
• Determine how the parent company will pay for the target acquisition company.
• Develop a strategic growth plan and explain how this acquisition supports the plan.