Corporate acquisitions and losses

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Reference no: EM1343913

Scenario:

Many corporate acquisitions result in losses to the acquiring firms' stockholders. A coworker has asked you to explain what a firm would gain from purchasing another corporation. Explain to the coworker the fundamentals of corporate acquisitions.

1. Why do firms purchase other corporations?

2. Do firms pay too much for the acquired corporation?

3. Why do so many acquisitions result in shareholder losses?

Reference no: EM1343913

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