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Many corporate acquisitions result in losses to the acquiring firms' stockholders. A coworker has asked you to explain what a firm would gain from purchasing another corporation. Explain to the coworker the fundamentals of corporate acquisitions.

â-¦Why do firms purchase other corporations?
â-¦Do firms pay too much for the acquired corporation?
â-¦Why do so many acquisitions result in shareholder losses?

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Many corporate acquisitions result in losses to the acquiring firms' stockholders. A coworker has asked you to explain what a firm would gain from purchasing another corporation. Explain to the coworker the fundamentals of corporate acquisitions.

Many corporate acquisitions result in losses to the acquiring firms' stockholders. A coworker has asked you to explain what a firm would gain from purchasing another corporation. Explain to the coworker the fundamentals of corporate acquisitions.

â-¦Why do firms purchase other corporations?
There are several reasons why firms purchase other corporations. Other corporations are purchased because the new company gives reduced costs and increased profits. Firms purchase other corporations because the acquired corporation helps geographic expansion, increase market share, or provides access ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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