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Coursework example - Capital Budgeting
Finance & Accounting
Pages 10 (2510 words)
William Hill Plc acquired 624 betting shops of Stanley Leisure – an Evaluation Introduction On June 18, 2005 a leading betting company named as William Hill Plc undertook an acquisition deal and purchased 624 licensed betting offices of Stanley Leisure with upfront cash consideration of ?…
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Next section highlights the motivation of top management of William Hill Plc behind this acquisition deal. Subsequent section emphasizes the impact of this acquisition on the capital structure of William Hill Plc. Last section of this article describes the impact of this acquisition on the value of William Hill Plc followed by a conclusion section which leads to the end of this article. Growth Forms – Organic v/s Acquisition There are different forms of growth approaches that companies generally follow. Typically if a company wants to make growth, then in such circumstances the company has two choices whether to go for an organic growth or to go for acquisition or a combination of both. For organic growth, the companies generally expand their business operations by opening up new branches, adding up new product lines etc. On the other hand, for acquisitions, the companies generally purchase an existing business such that the company owns that business and in this way it brings expansion in its existing business operations. Valuation Tools for Investment Opportunities Capital budgeting is a tool which is used to evaluate the financial viability of the projects whether in the form of organic growth or in acquisitions. ...
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