Why might the share market have this reaction

Assignment Help Financial Management
Reference no: EM131328776

When a company announces an acquisition of a company in the same industry there is typically very little change in its share price. However, if all else was the same but the company announced that it was acquiring a company in a different industry the share market reaction is usually negative. Why might the share market have this reaction?

Reference no: EM131328776

Questions Cloud

Mature company with low growth : Which of the two companies below is more likely to employ higher financial leverage? Explain from the perspective of advantages and disadvantages of debt financing. A R&D - intensive company. A mature company with low growth.
Prepare paiges tax return for last year : Paige also paid $295 for business publications other than those paid for by her employer and $325 for a local CPA to prepare her tax return last year.
What is the company what does it do and what is its industry : What is the company, what does it do and what is its industry? What is the company's business model?  What are the various ways in which it generates revenues?  What are its main expenses
What is the most we can pay for the land to make a deal work : What is the most we can pay for the land to make a deal work?
Why might the share market have this reaction : When a company announces an acquisition of a company in the same industry there is typically very little change in its share price. However, if all else was the same but the company announced that it was acquiring a company in a different industry th..
Which company is likely to have higher financial leverage : Solver Group is a global leader in the Biotechnology industry. Aants is an airline which operates globally. Both Solver and Aants are based in Australia. Which company is more likely to have higher financial leverage?
Submit the financial section of the business plan : Submit the Financial Section of the Business Plan. Your submission should include the following sections/pages: 1. Your start up costs 2. Start up costs assumptions 3. First year costs by month 4. Assumptions for first year costs 5. Years 2 and 3 cos..
Calculate the standard deviation in the estimated payment : Referring back to the Texas Department of Insurance data on closed claims for medical malpractice liability insurance presented in Problem 5, we wish to see if medical malpractice was more risky to the insurer during the 1998–2001 period than it was ..
How did employees deal with the consumer : How did employees deal with the consumer? Ask two friends about ways that they've been affected by consumer misbehavior. Share their examples. How are your experiences similar? Different

Reviews

Write a Review

Financial Management Questions & Answers

  What is the firms breakeven point in units

Cranberry woods spends an average of $9.30 in labor and $12.60 in materials on every unit it sells. sales commissions and shipping amount to another $3.10. all other cost are fixed and add up to 136,000 per month. what's is cranberry's contribution? ..

  What is the total interest paid

Suppose that a debt of $2200 with interest at i^(4) = 0.10 is amortized by payments of $500 at the end of each quarter for as long as possible. How many payments are made? What is the last payment? What is the total interest paid?

  What are the solution for over trading

What are the solution for over trading that has caused for expanding operation.

  What is the annual percentage yield for money

What is the purchase price of a 39-week “T-bill” (US Treasury note) with a maturity value of $4500 that earns an annual interest rate of 3.25 % ? How long (in years) will it take $1000 to triple if it is invested at 7.0% compounded continuously? Roun..

  Explore the capital budgeting techniques

Explore the capital budgeting techniques covered in the unit, NPV, PI, IRR, and Payback. Compare and contrast each of the techniques with an emphasis on comparative strengths and weaknesses.

  Medical malpractice liability crisis

Here the estimated dollars per claim for each year have been adjusted to 2007 dollars to account for inflation, so the values are all compatible. Texas was said to have had a “medical malpractice liability crisis” starting in about 1998 and continuin..

  Lease obligation fixed assets equity total assets

Two companies, Energen and Hastings Corporation, began operations with identical balance sheets. A year later, both required additional fixed assets at a cost of $25,000. Energen obtained a 5-year, $25,000 loan at a 10% interest rate from its bank.  ..

  Valuing preferred stock-the required return

Moraine, Inc., has an issue of preferred stock outstanding that pays a $3.50 dividend every year in perpetuity. If this issue currently sells for $85 per share, what is the required return?

  What is return shareholders are expecting

The Buckle (BKE) recently paid a $0.90 dividend. The dividend is expected to grow at a 19 percent rate. At the current stock price of $43.17, what is the return shareholders are expecting?

  Determine the rate of return realized

Brendan was given a gold coin originally purchased for $1 by his great grandfather 50 years ago. Today the coin is worth $450. Determine the rate of return (interest rate) realized from the original $1 investment to the future value of $450. (You are..

  Periodic payments between now and maturity

You are offered an investment that will pay you $100,000 in five years. There will be no periodic payments between now and maturity. You require a 6% return in order make such investments. You now have all of the variables in order to calculate the _..

  Suppose the initial margin on heating oil futures

Suppose the initial margin on heating oil futures is $12,500, the maintenance margin is $11,000 per contract, and you establish a long position of 15 contracts today, where each contract represents 36,000 gallons. Tomorrow, the contract settles down ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd