Only answer the question 3. How does the market balance sheet looks like when 3
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Only answer the question
3. How does the market balance sheet looks like when 3 bidders make their bid, see page 13 of the case, it says: “All three bidders set the value of Hertz in between 3.3 bn and 3.6 bn dollar, which would give the unsecured bonds an estimated 20 – 25% recovery”.
Assume the market balance sheet has the following items at the asset side: (1) company value of 3.3 –3.6 bn, (2) excess cash of 700 mio and (3) the proceeds of 850 mio from the sale of Donlen.
a) What are the items at the liability side of the market balance sheet?
b) Show that UNsecured bonds should be valued around 20% – 25% of par value (assume that secured loas are valued at par, 100%). Assume that the seniority (priority) rule is strictly applied.
Using Excel to conclude some important data, show it as a table
