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    Large Corporate Mergers

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    Do you think large corporate mergers and acquisitions encourage investment by the consumer? Why or why not? Can you give some examples of any major consolidations?

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    It depends on several factors. A company that acquires another will often pay for the other company with cash. These transactions are usually called acquisitions instead of mergers (because shareholders of the target company are eliminated from the picture and that company falls under the control of the bidder's shareholders). An acquisition can involve a cash and debt combination, a combination of cash and stock of the purchasing company, or simply stock.

    A "merger" is ...

    Solution Summary

    The solution provides a brief discussion of the investment opportunity and if investors are excited when mergers occur.