do you agree with this statement or not? give example of current events. write 250-300 words.

The pricing of the M&A depends basically on the benefit emerging in the deal and cost which should be less then the anticipated earning. Pricing strategy should be the price level that makes sense of the business which takes account with the expense of integrating the acquisition with the operation and expected benefit. The essential component for pricing strategy is calculations of the initials price of the merger and adjustment of new information which is available during negotiations. Pricing is most importantly depends on enterprise value to cash earning, equity value as the debt and any excess cash in the business are necessary adjustments to arrive at the value of what the owner actually "owns" in the busness and finally adjustment which depends the valuation or deal structure adjustments.

Excellent merger and acquisition deals can expand business, move into new business with new market segments or improve output with the involvement of different parties directly or indirectly involved like administrator, lawyer and investment banker. A company can do the payment by exchanging stocks, debt acquisition, paying cash, initial public offering, issuance of bonds, loans.Exchanging stock in merger and acquisition happens when the company has plentiful stock and a healthy balance sheet. As by exchanging share both the companies could share the risk but the buyer get befitted if the stock is overvalued. The stock deals offer the acquired company 's shareholders gain the profit from potential synergy with beyond the premium.In debt acquisition, when a company absorb large quantity of other's debt, it has greater management capabilities during liquidation. Paying cash is the mirror side of the exchanging stock but does not require the higher qualification of the managements. As paying cash is less dependent because of unstable exchange rate. Initial Public Offering really attractive to the investors as it is showing the long term strategy and desire to expand. Increasing the value of the IPO can increase the existing share price through the merger and acquisition. In Issuance of Bonds, a company may release time-definite with the interest rate and a buyer can be beneficial if they cheaply access the credit. Loans can be costly in merger and acquisition, in funding with debt merger put the interest rate as primary consideration.

For my opinion, exchanging stock is much more beneficial then paying cash as it makes the cost high for companies who deals with billions. Many giant companies use stock as currency for buying another company as they do not need to borrow money from outside if they are shortage with money. The risk is divided between the companies and ownership is also secured. It is also sometimes noticed that acquire company ended up owning the negligible part of combined companies.

Both cash and stock exchanging is popular among merger and acquisition. We can talk about the most recent acquisition of SoFi who is agreed to buy the Galileo for 1.2 billion. The whole deal going to happen in cash and stock basis as they want to launch a new product.They want to work together as Galileo take care more of the SoFi's competitors. The total deal consisted with $75million cash, $250 million debt and $875 million company stock negotiations.