Merger: A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits. Takeover: A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake. When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company. To determine: The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Question

Want to see the full answer?

Answer 1

Question

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 2

Question

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Answer 6

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Answer 7

Chapter 22, Problem 4CT

Summary Introduction

Merger:

A merger can be defined as an agreement that unifies two existing firms into a single new firm. Mergers can be of different types and can occur due to different reasons. However, the primary reasons why mergers and acquisitions occur are to expand the reach of a firm or diverse the firm into divisions or earn more profits.

Takeover:

A takeover can be defined as an activity that takes place when an acquiring firm makes a bid with the intention to consider control of a target company, most often by the purchase of a majority stake.

When the takeover goes through, the company that acquires a company becomes liable for all the activities, operations, debt, and holdings of the target company. In case when the target company is a publicly traded company then the acquiring company offers for all the outstanding shares of the company.

To determine:

The reason why shareholders from target companies enjoy an average gain when acquired, while acquiring shareholders often do not gain anything.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 22 - Prob. 1CC Ch. 22 - Prob. 2CC Ch. 22 - Prob. 3CC Ch. 22 - Prob. 4CC Ch. 22 - Prob. 5CC Ch. 22 - Prob. 6CC Ch. 22 - Prob. 7CC Ch. 22 - Prob. 8CC Ch. 22 - Prob. 9CC Ch. 22 - How can a hostile acquirer get around a poison...

Want to see the full answer?

Chapter 22 Solutions