Question: The city of Dryden is served by three banks which
The city of Dryden is served by three banks, which recently reported deposits of $250 million, $200 million, and $45 million, respectively. Calculate the Herfindahl index for the Dryden market area. If the second and third largest banks merge, what would the postmerger Herfindahl index be? Under the Department of Justice guidelines discussed in the chapter, would the Justice Department be likely to challenge this merger?
Answer to relevant QuestionsWhy do banks and other financial intermediaries exist in modern society, according to the theory of finance?In which of the situations described in the accompanying table do stockholders of both acquiring and acquired firms experience a gain in earnings per share as a result of a merger?What were the key provisions of the U.S International Banking Act of 1978 and the International Lending and Supervision Act of 1983?What different approaches to country-risk evaluation have international banks developed in recent years?Pinochio Corporation will import new wooden toys from a French manufacturer this week at a price of 200 Euros per item for eventual distribution to retail stores. The current Euro-dollar exchange rate is 0.6423 Euros per ...
Post your question