Significant capital constraints

Assignment Help Operation Management

Reference no: EM13809309

1. For each of the following scenarios, estimate how much value an acquisition will create, how much of that value will be appropriated by each of the bidding firms, and how much of that value will be appropriated by each of the target firms. In each of these scenarios, assume that firms do not face significant capital constraints.

(a) Abiding firm, A, is worth $27,000 as a stand-alone entity. A target firm, B, is worth$12,000 as a stand-alone entity, but $18,000 if it is acquired and integrated with Firm A. Several other firms are interested in acquiring Firm B, and Firm B is also worth $18,000if it is acquired by these other firms. If Firm A acquired Firm B, would this acquisition create value? If yes, how much? How much of this value would the equity holders of Firm A receive? How much would the equity holders of Firm B receive?

(b) The same scenario as above except that the value of Firm B, if it is acquired by the other firms interested in it, is only $12,000.

(c) The same scenario in part (a), except that the value of Firm B, if it is acquired by the other firms interested in it, is $16,000.

(d) The same scenario as in part (b), except that Firm B contacts several other firms and explains to them how they can create the same value with Firm B that Firm A does.

(e) The same scenario as in part (b), except that Firm B sues Firm A. After suing Firm A, Firm B installs a "supermajority" rule in how its board of directors operates. After putting this new rule in place, Firm B offers to buy back any stock purchased by Firm A for 20 percent above the current market price.

Reference no: EM13809309

Questions Cloud

Discuss how the no-growth movement influences : Discuss the key components and players involved in effective city planning and innovative planning practices. In your discussion, include issues that arrive concerning eminent domain. Discuss how the no-growth movement influences city growth.

Evaluate the role of ethical decision-making in business org : Ethics, Compliance Auditing, and Emerging Issues Imagine that you have been tasked with creating a proposal for the new CEO of your organization for establishing an ethics program and for conducting training and compliance auditing. For this assignme..

Determine the output displayed when the button is clicked : Determine the output displayed when the button is clicked. Replace each phrase containing "Until" with an equivalent phrase containing "While", and vice versa. For instance, the phrase (Until sum = 100) would be replaced by (While sum 100)

Discuss the public policies that issue presidential powers : President Obama's use of presidential powers in the last 18 months. Identify and discuss the public policies that have been at issue using these presidential powers.

Significant capital constraints : In each of these scenarios, assume that firms do not face significant capital constraints.

Determine the output displayed when the button is clicked : Determine the output displayed when the button is clicked. Determine the output displayed when the button is clicked

Create the gui for a timekeeping or payroll system for cms : CMS Systems, Inc. is a company that provides information systems consulting services to companies in the telecom industry in the United States and the United Kingdom. create the GUI for a timekeeping/payroll system for CMS

Write a effective research about salt river in arizona : Write a effective research about Salt River in Arizona and how it is important to the phoenix area. what kind of events happens there and how people enjoy Salt River in Summer and history.

Four primary forecasting techniques : Differentiate at least two or three key elements for each of the four primary forecasting techniques and how they apply to your chosen organization.

User Account

All Pages