Firms have more than one option for diversifying; among these options are the following: corporate entrepreneurship, strategic alliances, and mergers and acquisitions. Mergers and acquisitions can have a consolidating effect in the industry, and may force other industry players to merge. When a company 'buys' another company with a cash transaction, a newly legal entity is formed.
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This is true. The last sentence makes a really interesting point, and that's because many people don't know that the Federal Trade Commission (FTC) actually has veto power over acquisitions ...
This solution discusses the mergers and acquisitions question listed. A thorough explanation is provided.
Accounting, tax and legal factors affect an M&A strategy
How does the following effect mergers and acquisitions
o Accounting: Revenue enhancement, cost reduction, and risk management
o Taxes: Shields, synergies, and the weighted average cost of capital
o Legal: Corporate organization and ownership, litigation risk, and legal compliance
Select at least two effects from each category and explain their relevance in pursuing an M&A strategy.View Full Posting Details