American Airlines is considering purchasing Sun Country Airlines. Sun Country has indicated they are willing to sell the organization for a discounted premium amount. After months of discussion, the discounted premium amount has ranged from four to seventeen percent. Two weeks ago, American Airlines agreed to purchase Sun Country Airlines for the discounted premium amount of nine percent. Currently, Sun Country Airline’s stock price is $11, and they have 18,800,000 shares of outstanding stock. Based on the data provided, what is the amount Americans will buy Sun Country for? Show the Calculations.

note to the expert: I know that the market value of Sun Country Airlines is calculated as follow: $11 x 18,800,000 = 206,800,000 but I am confused about how to calculate the discounted premium of 9%. Should the discounted premium of 9% be subtracted or added to the total market value of sun country airlines? Please explain.

Answer rating: 100% (QA)

Step 11 The amount that American Airlines will buy Sun Country for can be calculated as follows 1 Ca... View the full answer