Why might a company want to invest in a company rather than buy it outright? Wouldn't they have more say if they bought the company?

Q: At times, companies try to induce voluntary conversion by offering an added incentive—maybe cash,…

A:

Q: Why do most acquisitions fail to create shareholder value?

A: Mergers and acquisitions generally failed to create or add value for the shareholders because of…

Q: What is market efficiency? How is the concept of market efficiency an important part of shareholder…

A: Introduction: Market efficiency-It is a term and it refers to any metric that helps in measuring…

Q: Why has real estate often been a key factor in corporate restructuring?

A: It is a move made by the corporate component to modify on a very basic level either its capital…

Q: What are the financial effects of firm acquisitions?

A: Corporations will acquire or merge with a different company in expectations of advancing the growth…

Q: What the benefits of the DuPont analysis to deconstruct a firms ROE?

A: Duopoint analysis  With the help of the DuPont Analysis, researchers can identify a company's areas…

Q: rights issue allows shareholders to purchase shares below market value, it may not increase…

A: Shareholders refers to the entities who buys the shares or stocks of a company and is entitle to the…

Q: Which of the following is an incentive for firms to conduct an IPO? Underwriter and advisor fees…

A: IPO is a process in which the company raises funds by selling its shares to the public for the first…

Q: own stock that they have previously issued?’

A: company wants to repurchase some of its own stock that they have previously issued because of…

Q: Why we have to valuate the company?

A: Value of a business refers to the business value. It shows the worth of the business as on a…

Q: Why would a company consider a liability to be a sacrifice for the future growth? Please explain why

A: A company might consider a liability a sacrifice for future growth because it allows for financing…

Q: How can an Investment be considered a liability since the company is forced to put resources into…

A: An investment can be considered a liability for a company when the company is forced to put…

Q: It is quite often we observe some firms takeover target firms from a different industry. If…

A: Diversified acquisition means those acquisitions in which the company acquires the other company to…

Q: In the process of determining fair value, the exit price refers to:   Multiple Choice   the amount…

A: Fair value is the exit price. Fair value is the amount that is determined by market participants…

Q: Explain how acquiring a firm with past losses can be beneficial.

A: The acquisition is a strategic move that a business entity adopts with the aim to acquire the…

Q: What does the Trade-off Theory say about the corporate's financing choices?Briefly explain.

A: Trade off theory is a capital structure theory which is trying to trade off between the benefit of…

Q: a) What is a conglomerate merger and why are they more likely to be approved? b) Limit pricing is a…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Ethical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock…

A: While taking business decisions, business ethics play an important role. Business ethics means right…

Q: Which of the following is not a financing decision?   A   Should the firm borrow money from a…

A: Financing decisions- It is concerned with the quantum of funds to be raised from the various…

Q: Which of the following is true regarding IPO pricing?     Answers: Underpricing is more popular…

A: Correct answer is (a) Underpricing is more popular which hurts the firm.

Q: Why would so many people invest in a company like AFCO? What could investors have done to prevent…

A: The majority of people invest in companies like AFCO in order to get faster and more profitable…

Q: Why would it be desirable to switch from an S corporation to C corporation once the business is…

A: S Corporation: it is the special tax status which is assigned to small corporations. S corporation…

Q: Why don’t all firms go private to capture these benefits?

A: The firm’s go private based on the following benefits,

Q: Do mergers create value? If so, who profits from this value?

A: The merger means a combination of two (or) more companies to create a synergic effect. There might…

Q: have the right to vote on a sale of the firm under any circumstances? Explain.

A: A voting right is the ability of a corporation's shareholders to vote on corporate policy issues…

Q: When can a company forfeit its shares?

A: The mechanism by which a corporation forfeits the stock of an investor or stockholder who ceases the…

Q: If you're worried about infinite liability, what alternative forms of ownership arrangements for…

A: The Answer

Q: or

A: A hostile takeover is a sort of business purchase or merger that is carried out against the…

Q: reduce political risk

A: Political risk refers to those risk that arises due to the change in government body of a country.…

Q: Explain the concept of ‘buying back of shares by a company. What are the effects of such a buy-back?…

A: Shares are the units of the equity ownership of a corporation that is held by the shareholders of…

Q: What is cost of financial distress to the firm without going bankrupt?Give two examples.

A: The financial distress costs are all such cost incurred by company due to the probability that it…

Q: When looking to invest corporate dollars, is the top-down approach is preferred over the bottom-up…

A: Answer: Corporations are exposed to factors which are related to macroeconomic. Therefore, while…

Q: share

A: Introduction: Investing in shares of the companies is considered to be a good investment strategy…

Q: What options does a company have if its board or management is opposed to an acquisition, a merger,…

A: Companies can use any of these defensive strategies to oppose an acquisition, merger or a takeover…