Financial Management Degree - Case Study Example

Only on StudentShare

Extract of sample
Financial Management Degree

As the acquirer buys another company and pays cash to the target's shareholders, the bidding shareholders would be able to retain the same level of control in the company because their equity proportion is not diluted. To some shareholders, retaining the level of control over the whole entity after the target company has been acquired is one of the major considerations (McDougall & Chenhall). Another advantage of cash purchase to the bidding shareholders is that is is simple and straightforward. A cash offer would be more likely attractive to the target's shareholders especially when economic times are not so predictable, therefore the acquisition deal would prove to have higher success.
A major disadvantage to the acquirer would be the huge sum of cash that it has to raise in order to fulfil the deal. While it is less likely for a company to raise such a huge amount of cash from its retained earnings, it is necessary for the company to raise it through other means, such as by incurring debt. The dilution of the capital structure of the company through higher debt, which affects its risk and credit rating, is a major disadvantage. If the company already has a high amount of debt, the acquirer's shareholders would find that the huge amount of debt to raise cash and pay for the acquisition would erode the company's credit rating, and would increase the risk of each share that they hold.
From the point of view of the target's ...Show more

Summary

I. In a takeover bid, a business may wish to adopt methods such as cash, loan or share exchange. Discuss the merits and demerits of each of these methods from the viewpoint of (a) the bidding business shareholders, and (b) the target business shareholders.
Author : cassandremoen
Financial Management Degree Case Study essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the case study on your topic
"Financial Management Degree Case Study"
with a personal 20% discount.
Grab the best paper

Related Essays

Financial Management Master Case Study
Kingfisher plc is a lead player of the global home improvement retail industry. The company has a long history dating back to decades of successful business operations beginning in the United Kingdom, today it has extended its operations through new branches dotted across major European markets as well as China.
9 pages (2250 words) Case Study
Financial Management Case Study
"The Abacus Group offers electronic component distribution, own brand product, specialist distribution of displays, embedded computing and wireless communications, and value added services including electromechanical sub contract manufacture." (Abacus Group Annual Report & Accounts, 2006)
6 pages (1500 words) Case Study
Human Resource Management High School Case Study
The situation shows that Robert Peters is probably the best qualified candidate for the position. Sporting a 3.6 GPA, he is obviously academic oriented and has also shown a certain degree of leadership ability as reflected by his stint as vice-president of the Student Government Association.
2 pages (500 words) Case Study
Operation Management Degree Case Study
In each department there were quality problems. Hassan is concerned that his managers were not performing at their best. Now the issue is to get the managers to improve their performance. Hassan has to take fast decisions in order to catch up with lost time.
12 pages (3000 words) Case Study
Business Ethics Degree Case Study
The fact that Heathrow carries around 70% of the International air traffic across the Atlantic is a pointer towards its role and influence. Some of the key stakeholders in this case can be identified as: The workforce: The working community for the Airport will be in for a shake up if the company faces adversity in functioning from any quarter.
6 pages (1500 words) Case Study
Strategic Management Degree Case Study
Constant evaluation of all the 4P's is important losing focus on any one of them can lead to a disaster. We will analyse the marketing strategy of Wal-Mart below keeping in view the 4P's: Since the Wal-Mart are the retailing stores an array of products is available to cater the needs of the customers.
4 pages (1000 words) Case Study
Financial Report Degree Case Study
The ratio analysis in particular, provides the detailed comparison of both the companies' financial position and performance based on the data obtained from the companies' financial statements from the stance of management, lenders and the investors. Both these companies belong to the retailing industry dealing in clothing and accessories business.
9 pages (2250 words) Case Study
Strategic Financial Management Case Study
Because of the current instability in commodity and oil prices and in interest and exchange rates, however, it has become difficult to attach an accurate value to companies. There are just too many variables and blind corners that could lead an equity valuation astray.
13 pages (3250 words) Case Study
International Management Case Study
This extends to the management of employee behaviour and the strategies deployed for the maximisation of employee motivation levels. With specific focus on whether or not knowledge of achievement motive would be of any value to expatriate managers in Madruga's Singapore subsidiary, the report will argue that even though it is of value, the said value can only be realised if pre-existing achievement motive knowledge is adjust to correspond with the culture in question.
4 pages (1000 words) Case Study
Case Study: Shield Financial Management
From the weak response of the salespeople, the manager resolved to use a standard plan to push them to do the follow up on the various leads. This course of action alone would not be
3 pages (750 words) Case Study
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT