In the late 1990s, many companies were pursuing acquisition-based growth strategies. A notable example is the acquisition of MCI by WorldCom, which proved to be a failure. A salient feature of this type of acquisition is the large part of the deal being financed by the acquiring company's stocks. Why they acquire prefer to pursue stock-based acquisition? You may illustrate your point using the deal of WorldCom-MCI. 

If company A buys company B when Company A's share is overpriced, would stock-based acquisition be a desirable strategy?

 

Answer rating: 100% (QA)

Companies often pursue stockbased acquisitions for several reasons 1 Preserving Cash By using their own stock as the currency for acquisition the acqu... View the full answer