Consider the following scenario. This is not factual. This is a scenario. 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
eight to twenty-two percent. Two weeks ago, American Airlines agreed to purchase Sun Country Airlines for the
discounted premium amount of eighteen percent. Currently, Sun Country Airline’s stock price is $12, and they
have 12,000,000 shares of outstanding stock.
Based on the data provided, what is the amount Americans will buy Sun Country for? Show the
calculations.
Sample Solution