How to Create Value
- New Perspectives on the Modern Corporation series
Chapter 8: Financing M & As and effects on merger value
In M & A operations the form of payment of the target firm is crucial for the success of the merger. This chapter examines the main alternatives of payment: by cash and by new stocks issued by the acquiring firm. The payment by new shares requires the exchange ratio between the shares of the acquiring firm and those of the target firm to be determined. The analysis indicates how to calculate the maximum exchange ratio the shareholders of the acquiring firm can pay without destroying value, and the minimum exchange ratio that makes the merger neutral for the shareholders of the target firm.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.