Problems:

Cox Communication wanted to buy the Cable system of Gannett. But the Cox Would need to bid about $2.7 billion. This case should focus on how much external financing a firm needs and what securities the firm should issue to raise this financing.

1. Should Cox communication Acquire Garnett company?? IF

EXHIBIT 8A

Pro forma cash flows for cox communications, if it did not

Purchase Gannett, but if other proposed acquisitions were

Undertaken. (figures are in millions of dollars)

EXHIBIT 8B

Pro forma cash flows for cox communications, if it

Purchases Gannett by issuing debt (figures are in millions

of dollars)

EXHIBIT 8C

Pro forma cash flows for cox communications if it

Purchases Gannett by issuing equity (figures are in millions

of dollars)

EXHIBIT 8D

Pro forma cash flows for cox communications if it

Purchased Gannett with a combination of debt, equity ($680

Million) and prides ($720 million) Hybrid Security Issuance. (figures are in millions of Dollars)

(a) Detailed Explanation to Support which Option is feasible. Why??

Require NPV, IIR, PBP Calculation with Proper equation and Graph explaining each year from 1999 to 2003 to support the reason.

(b)BCG Matrix. What Position Cox communication are in BCG Matrix? Why? Show reason with market share and market growth?