Problem Solution Lester Electronics
- Submitted by: Annasza
- Views: 1896
- Category: Other
- Date Submitted: 06/16/2010 05:46 PM
- Pages: 20
- Report this Essay
Running head: PROBLEM SOLUTION: LESTER ELECTRONICS
Problem Solution: Lester Electronics
Anna Barranco
University of Phoenix
Problem Solution: Lester Electronics
In the Lester Electronics scenario the owner of Shang-wa has decided to sell their business to Transnational Electronics Corporation (TEC). Before the decision is made to merge with another company there needs to be considerable research, negotiating, and benchmarking done to ensure that the merger is a good business decision. With any business acquisition there come risks. Projections about the future of how well the company will do along with determining whether or not the business will make the type of money to increase the wealth of the shareholders are inherited risks. Financial compensation for the shareholders will come in the way of shares or dividends.
Financing new projects such as the Shang-wa acquisition requires the business owners to look at the debt and equity of the organization. The business leaders will look at the number of assets along with the company’s history of productivity and competition. If the product is in demand, after looking at the potential of the company, and all considerations have been made, it may be a good business decision to purchase or merge with another company. There will be discussion surrounding the merger between Shang-wa Electronics and TEC. This merger may leave Lester Electronics in a position in which the company is not able to survive. In this paper the scenario and benchmarking surrounding the scenario will be discussed. In addition the weighted average cost of capital, capital structure mix, investment risks, and dividend policy on wealth maximization will be also be included in the discussion of this paper.
Number of mergers keeps growing, originally this strategy was primary seen in US, now is spreading worldwide and becoming the most important business growth strategy of this millennium. Daily business news brings...
Problem Solution: Lester Electronics
Anna Barranco
University of Phoenix
Problem Solution: Lester Electronics
In the Lester Electronics scenario the owner of Shang-wa has decided to sell their business to Transnational Electronics Corporation (TEC). Before the decision is made to merge with another company there needs to be considerable research, negotiating, and benchmarking done to ensure that the merger is a good business decision. With any business acquisition there come risks. Projections about the future of how well the company will do along with determining whether or not the business will make the type of money to increase the wealth of the shareholders are inherited risks. Financial compensation for the shareholders will come in the way of shares or dividends.
Financing new projects such as the Shang-wa acquisition requires the business owners to look at the debt and equity of the organization. The business leaders will look at the number of assets along with the company’s history of productivity and competition. If the product is in demand, after looking at the potential of the company, and all considerations have been made, it may be a good business decision to purchase or merge with another company. There will be discussion surrounding the merger between Shang-wa Electronics and TEC. This merger may leave Lester Electronics in a position in which the company is not able to survive. In this paper the scenario and benchmarking surrounding the scenario will be discussed. In addition the weighted average cost of capital, capital structure mix, investment risks, and dividend policy on wealth maximization will be also be included in the discussion of this paper.
Number of mergers keeps growing, originally this strategy was primary seen in US, now is spreading worldwide and becoming the most important business growth strategy of this millennium. Daily business news brings...