Question $2.[$Show all work and answer all parts. $2$nd image shows sample soulutions$]$

We are on $1/1/2024.$ You are asked to evaluate the potential Management Buyout of a company called Dill Corp. These are some useful information:

$($a$)[10$ points$]$ What is the highest purchase price the sponsors would be willing

to pay for Dill's equity?

$($b$)[10$ points$]$ What are the sources and uses of funds if the LBO sponsors pay

$$1000m$ for the equity of Dill? What is the associated IRR for the sponsors?

$($c$)[10$ points$]$ What are the sources and uses of funds if the target shareholders

require a $20\%$ premium on top of the current market capitalization of Dill?

What is the associated IRR for the LBO sponsors? Will they do the deal at

those conditions?