Corporate Finance Transactions Flashcards
What are forms of expansion and divestiture
Mergers
Acquisitions
Strategic Alliances
Joint Ventures - joint control by 2+ ventures
Spin offs - a new company created from the existing company but mgmt and operations are separate though shareholders are the same
What are 4 transaction considerations
Anti-competition risk
Estimating Synergies
Valuation
Payment method
What is the anti-competition risk?
Might be denied by regulatory bodies due to reduced level of competition creates a detriment to general consumers
What are the 5 key risks in corporate finance
Growth and increased market power Diversification Tax Form of acquisition Manager incentives
What are synergies involved in combination with ethics
idea is combined entities are worth more than independently
Revenue may increase cux
increased market shares
Raised pricing due to reduced competition
Ability to cross sell products
Costs may decrease due to increase efficiency and economies of scale
What are 4 international considerations of corporate finance
- International sources of capital
- Exchange rate risks
- Economic Risk
- Political Risk