Question
In: Economics
Star Computer and a small telecommunications company are considering a merger. A socially-minded member of Star...
Star Computer and a small telecommunications company are considering a merger. A socially-minded member of Star Computer's board of directors is against the merger, however, because she is concerned that the merger might not benefit society as a whole.
Provide the board member with an argument for why it may be socially beneficial for the merger to take place. Write the argument in 500 or more words.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Star Computer and a small telecommunications company are considering a merger. A socially-minded member of Star...
Star Computer and a small telecommunications company are
considering a merger. A socially-minded member of Star Computer's
board of directors is against the merger, however, because she is
concerned that the merger might not benefit society as a whole.
Provide the board member with an argument for why it may be
socially beneficial for the merger to take place. Write the
argument in 500 or more words.
Merger Valuation with Change in Capital Structure VolWorld Communications Inc., a large telecommunications company, is evaluating...
Merger Valuation with Change in Capital Structure
VolWorld Communications Inc., a large telecommunications
company, is evaluating the possible acquisition of Bulldog Cable
Company (BCC), a regional cable company. VolWorld's analysts
project the following post-merger data for BCC (in thousands of
dollars, with a year end of December 31):
2016
2017
2018
2019
2020
2021
Net sales
$450.0
$518.0
$ 555.0
$ 600.0
$ 643.0
Selling and administrative expense
45.0
53.0
60.0
68.0
73.0
Interest
40.0
45.0
47.0
52.0
54.0
Total net operating capital...
Merger Analysis TransWorld Communications Inc., a large telecommunications company, is evaluating the possible acquisition of Georgia...
Merger Analysis TransWorld Communications Inc., a large
telecommunications company, is evaluating the possible acquisition
of Georgia Cable Company (GCC), a regional cable company.
TransWorld's analysts project the following post-merger data for
GCC (in thousand of dollars): 2015 2016 2017 2018 Net Sales $482
$540 $584 $631 Selling and administrative expense 42 52 61 69
Interest 18 21 24 27 Tax rate after merger 30% Cost of goods sold
as a percent of sales 80% Beta after merger 1.663 Risk-free rate...
MERGER ANALYSIS Apilado Appliance Corporation is considering a merger with the Vaccaro Vacuum Company. Vaccaro is...
MERGER ANALYSIS Apilado Appliance Corporation is considering a
merger with the Vaccaro Vacuum Company. Vaccaro is a publicly
traded company, and its current beta is 1.30. Vaccaro has been
barely profitable, so it has paid an average of only 20% in taxes
during the last several years. In addition, it uses little debt,
having a debt ratio of just 25%. If the acquisition were made,
Apilado would operate Vaccaro as a separate, wholly owned
subsidiary. Apilado would pay taxes on...
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
Pittman Company is a small but growing manufacturer of
telecommunications equipment. The company has no sales force of its
own; rather, it relies completely on independent sales agents to
market its products. These agents are paid a sales commission of
15% for all items sold. Barbara Cheney, Pittman’s controller, has
just prepared the company’s budgeted income statement for next year
as follows: Pittman Company Budgeted Income Statement For the Year
Ended December 31 Sales $ 22,000,000 Manufacturing expenses:
Variable $...
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
Pittman Company is a small but growing manufacturer of
telecommunications equipment. The company has no sales force of its
own; rather, it relies completely on independent sales agents to
market its products. These agents are paid a sales commission of
15% for all items sold.
Barbara Cheney, Pittman’s controller, has just prepared the
company’s budgeted income statement for next year. The statement
follows:
Pittman Company
Budgeted Income Statement
For the Year Ended December 31
Sales
$
18,700,000
Manufacturing expenses:
Variable...
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
Pittman Company is a small but growing manufacturer of
telecommunications equipment. The company has no sales force of its
own; rather, it relies completely on independent sales agents to
market its products. These agents are paid a sales commission of
16% for all items sold.
Barbara Cheney, Pittman’s controller, has just prepared the
company’s budgeted income statement for next year. The statement
follows:
Pittman Company
Budgeted Income Statement
For the Year Ended December 31
Sales
$
16,300,000
Manufacturing expenses:
Variable...
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
Pittman Company is a small but growing manufacturer of
telecommunications equipment. The company has no sales force of its
own; rather, it relies completely on independent sales agents to
market its products. These agents are paid a sales commission of
15% for all items sold.
Barbara Cheney, Pittman’s controller, has just prepared the
company’s budgeted income statement for next year as follows:
Pittman Company
Budgeted Income Statement
For the Year Ended December 31
Sales
$
25,000,000
Manufacturing expenses:
Variable
$...
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
Pittman Company is a small but growing manufacturer of
telecommunications equipment. The company has no sales force of its
own; rather, it relies completely on independent sales agents to
market its products. These agents are paid a sales commission of
16% for all items sold. Barbara Cheney, Pittman’s controller, has
just prepared the company’s budgeted income statement for next
year. The statement follows: Pittman Company Budgeted Income
Statement For the Year Ended December 31 Sales $ 19,000,000
Manufacturing expenses: Variable...
Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
Pittman Company is a small but growing manufacturer of
telecommunications equipment. The company has no sales force of its
own; rather, it relies completely on independent sales agents to
market its products. These agents are paid a sales commission of
15% for all items sold. Barbara Cheney, Pittman’s controller, has
just prepared the company’s budgeted income statement for next year
as follows: Pittman Company Budgeted Income Statement For the Year
Ended December 31 Sales $ 17,000,000 Manufacturing expenses:
Variable $...
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