Empirically, what are the wealth effects of corporate control activities? Who wins and who loses in corporate control contests? What explanations or theories are offered for the differences in returns of acquiring firms’ common stocks? Why are higher takeover premiums paid in cash transactions than in stock transactions? How do other security holders fare in takeovers?
Answer to relevant QuestionsDescribe several different motives for mergers. Are each of these motives likely to increase bidder value? Describe the relationship between conglomerate mergers and portfolio theory. What is the desired result of merging two unrelated businesses? Has the empirical evidence proven corporate diversification to be successful? Firm X has three divisions that generate revenues of $1.3 billion, $2.5 billion, and $5.2 billion. Firm Y is a competitor with three associated divisions that generate $2 billion each. Using a Herfindahl Index to measure ...Charger Incorporated and Sparks Electrical Company are competitors in the business of electrical components distribution. Sparks is the smaller firm and has garnered the attention of the management of Charger, as Sparks has ...1. Determine the amount Jackson Enterprises is willing to pay in terms of goodwill. 2. If JE’s shares are currently trading at $62.43, then how many shares should JE offer for every share of MSI? 3. Assuming that MSI will ...
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