Essays on Target Company

Introduction

Capital structure refers to a company’s alignment of the long-term and short-term debts, common equity and the preferred equity. The term also include the analysis of how the company decides on how to allocate the cash flow into various components including a portion that is allocated to meet the financing needs of the debt capital and the other portion that is allocated to the shareholders as part of the dividend. Capital structure is a subset of the financial structure. Financial structure refers to the relative proportion of the various sources of finances that are used in the business ...

Introduction

Tingyi Holding Corporation is the Chinese company that deals in the production and distribution of instant noodles, baked products, and beverages. The company also produces soft drink under its brand name of Master Kong. The company is the largest manufacturer of instant noodles in China. Tingyi Holding Corporation was established in 191 by the Wei Brothers of Taiwan. The company got listed in 1996. The soft drink brand of the company, Master Kong, was declared to be the second most recognized brand in China. The company started producing instant noodles in 1992 under the brand name of Master Kong ...

Abstract

Banking and finance is arguably and in reality one of the biggest industries, if not the biggest. According to a recent report published by IBIS World, the banking industry has collective revenue of around $687 Billion. This is consolidated for the approximately 5,324 individual businesses and firms tied to the industry. In terms of its manpower size, the said report claims that the industry as a whole employs, both directly and indirectly, some 1.56 million people . If building doing business in the banking industry is being considered a venture, one has to factor in some important factors such ...

Business Memo

Dear Harry, In relation to the document forwarded by you stating the 60% acquisition premium to Framingham’s stockholders, I raise my concern for the underlying assumptions used for calculating the premium amount. I am sure that you understand the premium of 60% is high and we should aggressively check the assumptions behind those calculations. If we do not check the assumptions meticulously, we will be eventually end up transferring our wealth to the shareholders of the acquired company. Secondly, M&A related calculations are performed using long-term growth rate for the cash flows of the target company. Here also, ...

A merger is the combination of two separate companies into a single company with shareholders of the pre-merged two companies becoming shareholders of the merged company (Coyle, 2000). On the other hand an acquisition or take-over refers to the acquisition of the target company assets by a predator company. The key difference between a takeover and a merger is that in a takeover, the shareholders of the target company lose ownership and control, while in a merger shareholders of both companies become shareholders of the new merged company (Coyle, 2000). There are several reasons for Mergers and Acquisitions (M&A) ...