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Describe briefly four (4) factors which explain why shareholders of acquiring companies rarely benefit from takeovers.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter10: Corporate Governance

Section: Chapter Questions

Problem 8MC

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Similar questions

Describe briefly four (4) factors explaining why shareholders of acquiring companies rarely benefit from takeovers.
Describe briefly some of the important contributing factors which explain why shareholders of acquiring companies rarely benefit from takeovers
Which of the following is NOT normally regarded as being a barrier to hostile takeovers? a. Abnormally high executive compensation. b. Targeted share repurchases. c. Poison pills. d. Shareholder rights provisions. e. Restricted voting rights.
Examples of corporate restructuring are any of the following EXCEPT a. Split-off b. Carve-out C. Share-cut d. Spin-off
List three provisions in the corporate charter thataffect takeovers
What are the factors that determine whether the company should use cash acquisition or stock acquisition? Discuss five different defensive tactics that the target company can use to thwart this takeover attempt. 3) What are the possible cash flow benefits from this acquisition?
A company would repurchase its own stock for all of the following reasons except:a. it wishes to prevent unwanted takeover attempts.b. it wishes to increase the earnings per share.c. it believes the stock is overvalued.d. it needs the stock for employee bonuses.
The form of corporate restructuring in which a small group of investors raises loan financing to purchase all the equity shares of a public company is called Select one: a. a privatization. b. a leveraged buyout. c. an indenture. d. a debenture. e. a reorganization.
Discuss five different defensive tactics that the target company can use to thwart this takeover attempt. 2) What are the possible cash flow benefits from this acquisition? 3)Should Genie go ahead with the acquisition using cash or stock acquisition?
Do solve it as soon as possible Identify which statement is not correct. In a takeover bid to acquire a part or all shares in another company: Select one: a. Friendly merger reduces the chance of overpaying for target’s shares. b. Successful acquirer is likely to pay more for target’s shares in scenarios that include multiple rival bidders. c. Target company management would not accept an offer where the consideration for target’s shares exceeds the NPV of the merger. d. Hostile takeover may result in overpaying for target’s shares.
How does a hostile takeover affect the company’s stakeholder (shareholders, executives, employees, and society in general)? Is it usually beneficial or detrimental to these stakeholders? Why?
Why might one company have to complete more due diligence than another in a merger? A. None of these answers B. It is important for a company to know what it is buying C. Acquisitions can be risky D. If there is a large size discrepancy the merger seems more like an aquis