What are the two most important methods of paying for corporate acquisitions?
Answer to relevant QuestionsWhich of the five basic corporate finance functions might be considered nontraditional? Why do you think these functions have become so important in recent years? Can there be a difference between profit maximization and shareholder wealth maximization? If so, what could cause this difference? Which of the two should be the goal of the firm and its management? What is operating cash flow (OCF)? What is free cash flow (FCF), and how is it related to OCF? What is goodwill in the context of merger accounting? What must an acquiring company do if the value of an acquired company is revealed to have declined after a merger? Under what conditions would external expansion be preferable to internal expansion? What is the ultimate decision criterion for determining the acceptability of any expansion strategy?
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