URGENT - I have attached to this submission 3 documents: 1. Assignment questions I want you to answer, 2. The case document itself in a PDF, and 3. The case exhibits in excel format.

May 3, 2020 – Assignment Case

Your analysis of the case must answer these 5 questions:

1. Should Pacific issue new common stock to the external investment group? Assuming frictionless markets and no information impact (no signaling), what will be Pacific’s common stock price if new shares are issued to the external investment group?

2. Assuming the net proceeds from the common stock issue are used to reduce bank notes payable, does issuing new shares bring Pacific into compliance with the bank’s requirements?

3. Pacific is considering acquisition of privately-held High Country Seasonings. What is the weighted average cost of capital for the acquisition of High Country? Case exhibit 6 provides helpful current capital market information and data for 3 peer firms. Assume a 20% debt and 80% equity capital structure when calculating High Country’s WACC.

4. Should Pacific acquire High Country Seasonings? More precisely phrased, is the value of High Country greater than the Atwood’s asking price of 404,908 shares of Pacific worth $13.2 million? You must conduct a DCF valuation analysis of High Country to Pacific to answer this question accurately (this requires you to forecast High Country’s Income Statement, Balance Sheet and Cash Flows 2012 through 2015 and calculate High Country’s terminal value as of 2015). Use 7.9% as the cost of capital in your DCF analysis (your answer from Q2 above probably isn’t 7.9%, but I want you to use 7.9% as the cost of capital in your DCF analysis).

5. Does the potential acquisition of High Country Seasonings generate any positive side benefits to Pacific? Beyond the benefits of High Country’s brands and products, and your DCF valuation from #4 above, is there anything else?