Pursue stock-based acquisition

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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. (Hint: if company A buys company B when Company A's share is overpriced, would stock-based acquisition be a desirable strategy?

Reference no: EM133056703

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