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    Mergers and Acquisitions

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    Messner Co. reported $145,000 of net income for 2010. The accountant, in preparing the statement of cash flows, noted several items occurring during 2010 that might affect cash flows from operating activities. These items are listed below. 1-Messner purchased 100 shares of treasury stock at a cost of $20 per share. These shares were then resold at $25 per share. 2- Messner sold 100 shares of IBM common at $200 per share. The acquisition cost of these shares was $165 per share. This investment was shown on Messner's December 31, 2009, balance sheet as an available-for-sale security. 3- Messner revised its estimate for bad debts. Before 2010, Messner's bad debt expense was 1% of its net sales. In 2010, this percentage was increased to 2%. Net sales for 2010 were $500,000, and net accounts receivable decreased by $12,000 during 2010. 4- Messner issued 500 shares of its $10 par common stock for a patent. The market value of the shares on the date of the transaction was $23 per share. 5- Depreciation expense is $39,000. 6- Messner Co. holds 30% of the Sanchez Company's common stock as a long-term investment. Sanchez Company reported $27,000 of net income for 2010. 7- Sanchez Company paid a total of $2,000 of cash dividends to all investees in 2010. 8- Messner declared a 10% stock dividend. One thousand shares of $10 par common stock were distributed. The market price at date of issuance was $20 per share. Instructions Complete a schedule that shows the net cash flow from operating activities using the indirect method. Assume no items other than those listed above affected the computation of 2010 net cash flow from operating activities. Cash flows from operating activities $ Adjustments to reconcile net income to net cash provided by operating activities: $ $ $ $ $ $ Net cash provided/used by operating activities $

    Messner Co. reported $145,000 of net income for 2010. The accountant, in preparing the statement of cash flows, noted several items occurring during 2010 that might affect cash flows from operating activities. These items are listed below. 1-Messner purchased 100 shares of treasury stock at a cost of $20 per share. These sha

    InterClean - EnviroTech Merger Scenario

    Write in which you determine when rightsizing is appropriate and which steps are necessary to implement this process for the InterClean--EnviroTech Merger. Be sure to address the following questions within the paper: 1) Introduction 2) What are the viable options the company has at this point? 3) When might rightsizin

    M&A evaluation

    ABC Incorporated shares are currently trading for $32 per share. The firm has 1.13 billion shares outstanding. In addition, the market value of the firm's outstanding debt is $2 billion. The 10-year Treasury bond rate is 6.25%. ABC has an outstanding credit record and has earned a AAA rating from the major credit-rating agencies

    M&A evaluation for HiFlyer Corporation

    HiFlyer Corporation does not currently have any debt. Its tax rate is .4 and its unlevered beta is estimated by examining comparable companies to be 2.0. The 10-year bond rate is 6.25%, and the historical risk premium over the risk-free rate is 5.5%. Next year, HiFlyer expects to borrow up to 75% of its equity value to fund f

    Research strategies; team dilemma; external roles for team members; merger effect

    Question 1 of 4: Research strategies for moving parties away from egocentric perceptions of conflict and toward more mutually-held perceptions. Question 2 of 4: Consider the following team dilemma example: ¨A group of MBA students is working on a class project that counts for 50 percent of their grade. Some take a higher c

    Control premium percentage, total transaction value

    1. Bulldog Industries is offering, as consideration for merger target Blazerco, 1.5 shares of their stock for each share of Blazerco. There are 1 million shares of Blazerco outstanding, and its stock price was $50 before the merger offer. Bulldog's preoffer stock price was $40. What is the control premium percentage offered? Now

    FIN/370 Virtual Organization Strategy

    Select a Virtual Organization (Huffman Trucking). Assume that your selected organization is a privately held company and that it wants to expand its operations. The organization is faced with the below option to expand its operations. Option: They can acquire another company in the same industry. Must cover: 1) Stre

    Step Acquisition of Company B by Company A

    See the attachments. On 5th July 2007 company A initially invested 15% in company B @ par ( i.e. paying CU 1 per share ) (no premium). On 2nd August, 2007 A acquired additional 10% in company B buying 50 million shares from other exiting shareholder on an OTC basis ( paying CU2 per share (the extra CU 1 above par of CU 1

    Mergers and Acquisitions for VISA Company.

    1. If you were to pick one company for VISA company to merge with, what would it be? Explain your choice with respect to possible benefits of this merger and why you would choose this company over any other choice for a potential. 2. How would you finance a takeover of this chosen corporation? Explain your reasoning. 3.

    Southwest Airlines Acquisition Strategy for AirTran

    Given the recent announcement of acquisition of AirTran by Southwest Airlines, analyze the Southwest's acquisition strategy to determine the long-term impact (synergy) on the value of the company. Explain what the management rationale (motive) behind the acquisition of AirTran, whether you agree with the management or you differ

    Corporate Acquisitions and Losses

    Scenario: 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. 1. Why do firms purchase other corporations? 2. Do firms pay too m

    Mergers and Acquisitions failures

    How do M&A failures impact corporate restructuring? Compare and contrast M&A failures, such as technical and legal insolvency, and bankruptcy. Also need to consider what happens to the stakeholders, company image, price per share, market share, company assets, industry position, goodwill, and service capability. Once the fail

    Hewlett Packard/Compaq merger

    For the Hewlett Packard/Compaq merger, and in relevance to contingency plans which could have been anticipated for the strategy, As a result of your investigation and analysis, would you recommend a different strategy? Why or why not? APA format. Please cite sources.

    How to Prepare a Pro Forma Income Statement

    Using the sample template for the project, prepare a pro forma income statement for TCB. Your proforma financial statement should anticipate a 20% increase in Gross Margin (GM) and Net Income Before Taxes (NIBT) after the merger of TCB and BDE.

    M&A Strategy

    Company HP/Compaq Were there any contingency plans or options that should have been anticipated or used for the M&A strategy? If there are any, what would you have recommended? Why?

    1) Name three of the ten Change Forces. 2) The greatest change force is technological changes - True or False? 3) What is the difference between Merger and Tender Offer? 4) What are the eight Federal Securities Laws? 5) M&A activities include: A) Joint Ventures B) Divestitures C) Carve-outs D) Spin-offs E) All of the above 6) Define: Horizontal Merger 7) Define: Vertical Merger 8) Define: Conglomerate Merger 9) Define: Hostile Takeovers 10) Name two characteristics that a firm may possess that make it vulnerable to a takeover 11) The study of valuation is important for M&A because a major cause of acquisition failures is that the bidder pays too much. True or False 12) The leading methods used in the valuation include: A) comparable companies or comparable transactions approach B) spreadsheet approach C) formula approach D) All of the above 13) Valuation is central to the merger process? True of False 14) Firms should merge only if the value to shareholders will be enhanced. True or False 15) Internal control mechanisms for effective corporate governance include the board of directors, ownership concentration, and executive compensation. True or False 16) Outside control mechanisms for effective corporate governance include stock price performance, institutional investors, proxy contests, and takeovers. True or False 17) List three reasons why mergers fail.

    1) Name three of the ten Change Forces. 2) The greatest change force is technological changes - True or False? 3) What is the difference between Merger and Tender Offer? 4) What are the eight Federal Securities Laws? 5) M&A activities include: A) Joint Ventures B) Divestitures C) Carve-outs D) Spin-offs E) Al

    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? â-¦Do firms pay too much for

    Merger of Sprint and T-Mobile Add Value to Shareholders of Both

    Rumors about potential mergers are often a hot topic in the business press. One rumor being floated around recently is a potential merger between mobile phone giants T-Mobile and Sprint. Mergers between two large companies are always complicated, but some have noted the possible synergies in 4G technologies that might be possibl

    Mergers and Shareholder Value for Bentley and Rolls

    Bentley Corp. and Rolls Manfacturing are considering a merger. The possible states of the economy and each company's value are below: State Probability Bentley Rolls Boom 0.7 $280,000 $250,000 Recession 0.3 $100,000 $70,000 Bentley currently has a bond issue out

    Fixed costs, sunk costs, merger, profit sharing plan

    9. To open a new business, a manager must obtain a license from the city for $20,000. The license is transferable, but only $3,000 is refundable in the event the firm does not use the license. a. What are the firm's fixed costs? Sunk costs? b. Suppose the manager obtains a license but then decides against opening the business