Problem:
In July 2007, Newscorp entered into an agreement to purchase all of the outstanding shares of Dow Jones and Company for $60 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of interest-bearing liabilities on the balance sheet of Dow Jones was $1.46 billion.
Required:
Question: Estimate the cost of this acquisition to the shareholders of Newscorp.
Note: Provide support for your underlying principle.