What are the potential cost advantages of these mergers

Assignment Help Finance Basics
Reference no: EM131327385

The last decade has witnessed an unprecedented number of mega-mergers in the banking industry: Bank of America's acquisitions of Fleet Bank, MBNA, and U.S. Trust; Bank of New York's acquisition of Mellon Financial; and Wells Fargo's acquisition of Wachovia, to name several of the largest consolidations. Besides growth for its own sake, these superbanks are able to offer one-stop shopping for financial services: everything from savings accounts to home mortgages, investment account, insurance vehicles, and financial planning.

a. In the short run, what are the potential cost advantages of these mergers? Explain.

b. Is a $300 billion national bank likely to be more efficient than a $30 billion regional bank or a $3 billion state-based bank? What economic evidence is needed to determine whether there are long-run increasing returns to scale in banking?

c. Do you think these mergers are predicated on economies of scope?

Reference no: EM131327385

Questions Cloud

What is the average capital gains yield : The possibility that more than one discount rate can cause the net present value of an investment to equal zero is referred to as: A stock has paid dividends of $1.70, $1.85, $2.00, $2.20, and $2.50 over the past five years, respectively. What is the..
What are the potential cost advantages of these mergers : Is a $300 billion national bank likely to be more efficient than a $30 billion regional bank or a $3 billion state-based bank? What economic evidence is needed to determine whether there are long-run increasing returns to scale in banking?
Summarize each of the articles given below : Find two articles for each topic chosen. In one large paragraph, take topic #1 and (a) summarize each of the two articles; (b) compare the two articles to each other; and (3) give a personal statement as to why this topic is important to African A..
Discuss the legitimacy of the quote : Discuss the legitimacy of the quote above. Do you agree with the quote? Why or why not? As part of your answer include a discussion of why and how you would increase Civic Engagement and Renewal in the United States today
What are the potential cost advantages of these mergers : Is a $300 billion national bank likely to be more efficient than a $30 billion regional bank or a $3 billion state-based bank? What economic evidence is needed to determine whether there are long-run increasing returns to scale in banking?
What are the major differences between the four cpm loans : What are the major differences between the four CPM loans discussed?- What are the advantages to borrowers and risks to lenders for each? What elements do each of the loans have in common?
Define amortization and list the five types : Why do the monthly payments in the beginning months of a CPM loan contain a higher proportion of interest than principal repayment?
Discuss about the birth of a nation history : The early years of the 1900s with the heightened racism and increased lynchings that were occurring. How did this environment, if at all, impact black and white children during the early 1900s?Do you believe these actions perpetuated racism with ..
What are loan closing cost and how can they be categorized : What are loan closing costs? How can they be categorized?- In the absence of loan fees, does repaying a loan early ever affect the actual or true interest cost to the borrower?

Reviews

Write a Review

Finance Basics Questions & Answers

  Shares of alligator common stock

The Alligator Lock Company is planning a two-for-one stock split. You own 5,000 shares of Alligator's common stock that is currently selling for $120 a share. What is the value of your Alligator stock now, and what will it be after the split?

  Relative risk of the various types of securities

Explain the relative risk of the various types of securities in which a money market fund may invest.

  Firm debt-equity ratio

Zombie Corp. has a profit margin of 4.8 percent, total asset turnover of 2.0, and ROE of 19.34 percent. What is this firm's debt-equity ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

  Determining the appropriate discount rate

The appropriate discount rate is 14 percent. If she is offered $30,000 to cancel the contract, should she do it?

  Describing the pros and cons of the choice

Describing the pros and cons of the choice

  Higher prices make box-office debut

Higher Prices Make Box-Office Debut, The Wall Street Journal; Published in Mar, 25, 2010.

  Calculate the yield to maturity of bloomington inc

Bloomington Inc. issues a 20-year 6% annual coupon bond exactly a year prior to the due date of Problem

  Objective type questions on leverage analysis

Objective type questions on leverage analysis also the company bases its sensitivity analysis on the expected case scenario

  Read dartmouth-hitchcock medical center spine careread duke

read dartmouth-hitchcock medical center spine careread duke heart failure program 604033-hcb-eng.answer the following

  Computation of present value

(Computation of Present Value) Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods.

  Calculation of irr, npv of a project with equal cash flows

Calculation of IRR, NPV of a project with equal cash flows through life and what is the project's IRR

  Does cn rail have an effective corporate governance system

SEDAR is a free service in Canada where you can find the annual reports of all Canadian public companies and other regulatory filings. Does CN Rail have an effective corporate governance system? Explain.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd