Hello, could you please answer the following question in details. Thank you very much! Are the following statements true or false? Justify your answer. Mergers inspired by vertical integration motives are very rare nowadays, as transaction costs have decreased substantially since the second merger wave. “It is always advisable for a company to diversify its activities, in order to limit the risk of being too exposed to one activity”

3. Merger valuation and discounted cash flows When a merger takes place between two companies to form a single firm, the target company does not continue identity. Consider the following scenario: continues does not continue to operate as a separate Newtown Propane Inc. is considering an acquisition of Pirtucon Co., and estimates that acquiring Pirtucon will result in incremental after- tax net cash flows in years 1-3 of $5 million, $7.5 million, and $9 million, respectively. After the first three years, the incremental cash flows contributed by the Pirtucon acquisition are expected to grow at a constant rate of 5% per year. Newtown's current beta is 0.80, but its post-merger beta is expected to be 1.04. The risk-free rate is 4.5%, and the market risk premium is 6.60%. Based on this information, complete the following table by selecting the appropriate values. (Note: Round your intermediate calculations to two decimal places.) Post-merger cost of equity Projected value of the cash…

21. Which of the following are generally true about wealth gains or losses to stockholders following a merger? A. Stockholders of the target firm have zero or negative wealth gains B. Stockholders of the acquiring firm have zero or negative wealth gains C. Stockholders of competing firms have zero or negative wealth gains D. Stockholders of the target firm have positive wealth gains E. Both B and D 22. Empirical research about the method payment for mergers has shown that A. Returns for acquiring firm stockholders are much lower when cash is used for payment B. Returns for target firm stockholders are much lower when cash is used for payment C. Returns for competing firms are much lower when cash is used for payment D. Returns for acquiring firm stockholders are much higher when cash is used for payment E. None of the above 23. If a firm wishes to expand geographically, it is often preferable to do it by acquiring an existing firm rather than greenfield entry, because A. The…

The following three Fls dominate a local market and their total assets are given below. Institution Asset Size Bank A $50 million Bank B $60 million Bank C $90 million Under the 1982 guidelines, would the Fed approve the merger of Banks A and C? It is likely to approve because it is not a concentrated market. It is unlikely to approve because the post-merger HHI has increased by over 100. It is likely to approve because the post-merger HHI has increased by over 100. Likely to approve because the post-merger HHI has increased by less than 5,000. It is unlikely to approve because the post-merger HHI has increased by an amount over 5,000.

Initial Public Offering (IPO) - In the chapter we are provided with an example of the Industrial and Commercial Bank of China offering shares of their corporation to the public. The biggest pro of a firm based in Mexico taking this route, would be the gain of capital. A con that comes with this is a loss of control of your company. IF you were to lose majority control over your business, this could have potentially catastrophic impacts.  The Global Bond Market - "Companies will issue international bonds if they believe it will lower their cost of capital" Foreign bonds - On the pro side of foreign bonds, the firm can raise capital in foreign currencies. This opens up more potential investors to the firm. A con of foreign bonds would be the exposure of foreign exchange risk. Foreign exchange risk can be risky, and if the Mexican peso depreciates significantly on the foreign exchange market, this could potentially crush the Mexican capital market. Eurobonds - Eurobonds are another and…

Synergies from mergers and acquisitions may be operating or financial in nature. Which of the following is a financial synergy?a. Better debt capacity and cost of debt b. Improved forecast for demand and supply of the main product of the parent companyc. Improved employee productivityd. Improved market share

Recent Merger and Acquisition (M&A) Activities for AT&T and Verizon evaluate the effect of interest rates and time value of money by presenting a summary of recent M&A activities for both companies. Summary should include a brief discussion of the financing tools used and the cost of capital for these M&A activities.

With respect to Microsoft’s acquisitions, Skype and Nuance, discuss the strategic benefits expected to accrue under the following sub-headings: product development speed to market risk market power competitive scope barriers to entry diversification   The Case From humble beginnings in Gates’s family garage, Microsoft has grown to exceed $77.85 billion of revenue in 2013 and offer a product line extending from gaming (Xbox) and Internet services (Internet Explorer and Bing) to mobile devices (Windows Phones). In 2011, Microsoft diversified its product line yet again through acquiring Skype Global for $8.5 billion in cash. Although Microsoft had previously ventured into the Internet communications industry with Windows Live Messenger, Skype offered Microsoft broader device support, mobile video calling, and access to over 170 million Skype users, potential new clients for Microsoft’s existing products. Microsoft considered Skype a valuable acquisition due to the strategic fit between…

Discuss the concepts of Company restructuring.What type of merger is represented by the Atlas Mara group? What are the benefits? Give factual details. (Atlas Mara, Finance bank, Access bank and Cavmont bank story).