Takeover

corporation is that your shareholders are not subject to limited liability. b. Restrictive covenants in debt agreements are an effective way to reduce agency conflicts between stockholders and managers. c. Managers generally welcome hostile takeovers since they often increase the company’s stock price. d. Statements a and b are correct. e. None of the answers above is correct. Partnership form Answer: d [xi]. Which of the following statements is most correct?

Generally, under-performing companies are the prime targets of hostile takeovers, so it makes sense that aligning shareholder and executive goals is a major way to avoid that. One popular way of aligning these goals is through the use of elaborate, structured compensation plans for executives which directly tie an executive’s

1. Several factors have made Interco an attractive takeover target: 1) Interco’s stock is undervalued due to poor performance in the apparel and general merchandising divisions, which have weakened Interco’s valuation as a whole. 2) As stated by the equity analysts, Interco is an over capitalized company with potential to grow, which makes an acquisition easy to finance. 3) Interco is also a cash generative target for a potential acquirer as it generates approximately $0.10 of operating cash flow

Company Profile of CompuTech Company Marco Garibaldi was a computer hacker and began to develop computer programs in the basement of his parents’ home. His first software program named as “WordPro” aroused great interest among the academic and the business communities. That was the story behind the establishment of “CompuTech Industries” in 1983. The company went to public in 1990 for the first time. By the end of 1995, CompuTech’s stock price was $25 per share and its outstanding shares were

threat of the hostile takeover. The second part will be discussed about the financial analysis of the projects the potential problems comes with it and it will consider the division of the projects in the aggregate project plan. Finally, the third part will provide recommendations of the projects to select to the Board of Directors, followed by some comments and implications in the conclusion section. HOSTILE TAKEOVER The potential threat of hostile takeover and the importance

Nina’s Fashions Inc. Case Study There are 7 vital parts to completing this comprehensive analysis of whether Nina’s Fashions and their management should acquire the Chic Company. 1) Gather information regarding mergers and present it to Nina’s board of directors. 2) Discuss reasons and factors justifying mergers, including their benefits to society and each company. 3) Discuss the Pro’s and Con’s of a hostile versus friendly mergers, along with some data on how shareholders from

Question 1 Railroading industry overview: The Railroad revolution in the United States began in the early 1800s. The developed infrastructure was used for freight transportation business. In the mid-1800s the industry experienced explosive growth, followed by significant consolidation in 1870. The rail road companies initiated expansion through acquisitions in attempt to reduce marginal costs and increase their market share. As a result of this competition, a number of cartels were formed; therefore

These few years, cross-border mergers and acquisitions have increased, accelerating the globalization of manufacturing and restructuring industrial structure at the worldwide level (Kang, N. and S, Johansson., 2000). Wal-Mart is one of the examples of real world cross-border mergers and acquisitions; this can enlarge the market reach. Wal-Mart was founded by Sam Walton with a single store in Rogers, Arkansas in 1962 and has grown to the world’s largest retailer, its headquarters are in Bentonville

Case 70 Computer Concepts/CompuTech Merger Analysis QUESTIONS Question 1 Several factors have been proposed as providing a rationale for mergers. Among the more prominent ones are (1) tax considerations, (2) diversification, (3) control, (4) purchase of assets below replacement cost, and (5) synergy. From the standpoint of society, which of these reasons are justifiable? Which are not? Why is such a question relevant to a company like CompuTech, which is considering a specific acquisition

had corporate lawyers who represented country’s largest companies, and they handled the taxes and the legal work behind the issuing of stocks. However, they didn’t do litigation and proxy fight because they did not deal with the hostile corporate takeovers.