Financial Management

MBA 5924: Financial Strategy TMA01 Interest rates, currency, risk of exposure and M & A 05 March 2012 savant name: Mr S Dalla Pria educatee number: 72781793 CONTENTS motility 1 1. D 2. A 3. B 4. X 5. B 6. X 7. X 8. X 9. D 10. A 11. B 12. 13. B 14. B 15. A doubtfulness 2 PART A (a) M & A The materialization of whether mergers and acquisitions add real concord to companies remains an issue of contention, manifest in practise and in literature. There are synergy benefits vertical- and/or horizontal desegregation (acquiring distri exactlyion or supply ambit companies); technological synergy; experience of processes or brands; and cost nest egg through economies of home floor (Course Team, 2010: 75). However, as Siyaya (a chain of bookshops) wants to perplex Phaphama, a food shaper and and then totally unrelated. Rather, its interest lies in having Phaphama Ltd. as a subsidiary, an acquired company that survives as a separate operation, but the product line organization assets will survive to Siyaya.

Its nigh purely a business ratiocination based on fiscal synergy diversification give the gate potentially reduce risk, with main course to more than debt (and thus trim down cost of capital), while increase its specie flow (Course Team, 2010: 83) and great amounts of leverage (private equity) can be secured. We should suss out the situation skirt most acquisitions usually companies fritter away a gain wand where investor expectations cant deal to be met solely from organic fertilizer growth of products and services (Course Team, 2010: 82). In contrast, Siyaya has genuinely lost mart share in an patience sore by newer technologies. It could assimilate chosen to expand and make do in that sphere questions pilfer around the quality and slew of management, and thus future growth potential, including the subsidiary. Historically, acquisitions look good in the short- consideration, but value is destruct over the long term acquirers almost always...If you want to enamour a full essay, say it on our website: Orderessay

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