Acquisition: An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm. The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm. Diversification: Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio. To determine: The reason why managers must not acquire firms in different industries to diversify a company.

Question

Want to see the full answer?

Answer 1

Question

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

No ai ...??? Gpt correct an7. If sales are $1,000,000 and net income is $150,000, what is the profit margin?

What is the future value of $5,000 invested for 3 years at an annual interest rate of 6% compounded annually ?

If a bond has a face value of $1,000, a coupon rate of 5%, and pays interest annually, what is the annual interest payment? A) $50B) $100C) $500D) $5 help me pl

Answer 2

Question

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Answer 6

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Answer 7

Chapter 22, Problem 8CT

Summary Introduction

Acquisition:

An acquisition can be defined as a corporate activity wherein a firm purchases most, even though not all, of the shares of a firm so as to assume control over it. An acquisition takes place when the acquirer acquires more than fifty percent ownership in the target firm.

The acquirer normally busy the stocks and other assets of the target firm, thereby allowing the acquirer to take decisions related to the newly acquired assets without the consent of the shareholders of the target firm.

Diversification:

Diversification can be defined as a technique used to manage risks by mixing a group of different investments in a particular portfolio. Its chief objective is to yield higher returns generate lower risks as compared to individual investments in the portfolio.

To determine:

The reason why managers must not acquire firms in different industries to diversify a company.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 22 - Prob. 1CC Ch. 22 - Prob. 2CC Ch. 22 - Prob. 3CC Ch. 22 - Prob. 4CC Ch. 22 - Prob. 5CC Ch. 22 - Prob. 6CC Ch. 22 - Prob. 7CC Ch. 22 - Prob. 8CC Ch. 22 - Prob. 9CC Ch. 22 - How can a hostile acquirer get around a poison...

Videos

Want to see the full answer?

Chapter 22 Solutions