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Why might a company want to invest in a company rather than buy it outright? Wouldn't they have more say if they bought the company?
Step by step
Solved in 2 steps
- Why would a company consider going public?What are some advantages and disadvantages?what are some risks that private equities encounter when they're buying a companyAre poison-pill defenses ethical? If a potential acquirer buys company stock legally, thereby becoming a part owner of the company, should management be allowed to entrench itself against the wishes of this owner? Explain your answer.
- Why would so many people invest in a company like AFCO? What could investors have done to prevent themselves from falling into investment schemes such as this?What options does a company have if its board or management is opposed to an acquisition, a merger, or a takeover?Suppose you need additional capital to expand,and you sell some stock to outside investors. If youmaintain enough stock to control the company,what type of agency conflict might occur?
- Ethical Considerations. Are poison-pill defenses ethical? If a potential acquirer buys company stock legally,thereby becoming a part owner of the company, shouldmanagement be allowed to entrench itself against thewishes of this owner? Explain your answer.Why would it be desirable to switch from an S corporation to C corporation once the business is growing fast?Is it feasible for a new company endeavor to be lucrative while still experiencing financial difficulties?
- Because the cost of buying higher market share through acquisition may far exceed its revenue value, what factors should be considered by the company first.What do you see as some of the possible problems if shareholder value is seen as a strategy (and not an outcome)?Can a firm maximize its profit if it is only managed to meet shareholders' interests? (Own words please)