What are the different types of mergers and the various rationales for mergers? What determines the...

What are the different types of mergers and the various rationales for mergers? What determines the potential value of a target firm and discuss the various considerations that influence the bid price. Explain whether the typical merger creates value for the participating shareholders.

Expert Solution

The market capitalization determines the value of the target firm i.e. total no. of shares multiply by share price.

Synergy effects the bid price generally.

Generally, the merger creates value for the participating shareholders in the form of synergy as when entities combine they result in some common investment which ultimately affects net profit as well as share price.

jeff jeffy answered 2 years ago

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