1. Merrill owns less than half of the combined firms, although it contributed more than one-half of the combined firms...
2. Why do you believe Merrill was willing to limit its influence in the combined firms?
3. What method of accounting would Merrill use to show its investment in BlackRock?
During the 1990s, many financial services companies began offering mutual funds to their current customers who were pouring money into the then booming stock market. Hoping to become financial super markets offering an array of financial services to their customers, these firms offered mutual funds under their own brand name. The proliferation of mutual funds made it more difficult to be noticed by potential customers and required the firms to boost substantially advertising expenditures at a time when increased competition was reducing mutual fund management fees. In addition, potential customers were concerned that brokers would promote their own firm’s mutual funds to boost profits.
Mutual funds are like a pool of funds gathered by different small investors that have simalar investment perspective about returns on their investments. These funds are managed by professional investment managers who act smartly on behalf of the...
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Question Posted: September 13, 2012 00:46:31