4 pages due in 6 hours from now. Gaining Control Over
Another Company – How do you come out on top?
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Assume that you are the CEO of one of the selected companies.
You are responsible for gaining control over the other company. You have three
(3) choices, either of which you believe that the Board of Directors will
support.
Choice 1: Your company acquires 35% of the voting stock of
the target company.
Choice 2: Your company acquires 51% of the voting stock of
the target company.
Choice 3: Your company acquires 100% of the voting stock of
the target company.
Write a four to five (4-5) page paper in which you:
Provide a brief background introduction on both the company
that you are working for and the company that you are responsible for gaining
control over.
Specify the overall manner in which the acquisition fits
into your company’ strategic direction. Next, identify at least three (3)
possible synergies that could occur as a result of the proposed acquisition.
Select two (2) out of the three (3) choices provided in the
above scenario, and analyze the key accounting requirements for each of the two
(2) choices that you selected. Next, suggest one (1) strategy in which you
would prepare the financial statements for your company after the acquisition
under each of the two (2) choices.
Select the choice that you consider to be the most
advantageous to your company. Explain to the Board of Directors at least three
(3) reasons why your selected choice is the most advantageous to the company.
Assume two (2) years after the acquisition, your Board of
Directors wants to offer the shares back to the public in hopes of making a
large profit. Assume that in each of the two (2) years your company and the
target company have had exactly the same reported net income as they did in the
year of acquisition. Determine the type of value, (e.g., cost of fair value)
that you would use to report the subsidiary’s net asset in the subsidiary’s
financial statements, which the company will distribute to the public with the
public offering. Provide support for your rationale.
Use at least three (3) quality academic resources in this
assignment. Note:Wikipedia and other Websites do not qualify as academic
resources.
The two companies have to be actual companies. Research the
two companies and pull their financial statements to do the assignment.
