Week 6 Prepare DFCF Stock Valuation (Discounted Free Cash Flow Stock Valuation) and EVA/MVA Analysis (Rev. 12/14/16) Students may elect to use the...
to have rights and ownership in a company or the organization.
In support of this
statement, there are a number of arguments validated. Firstly, mergers contribute greatly
towards the profitability of firms hence availing funds for research and development projects.
Secondly, mergers allow for a collaborative interaction between parties involved; something
that is not common with acquisitions. Additionally, mergers can be engaged without any
charges involved generally considered as a transaction that is free from tax.
The profitability of any firm is depended on mergers. Mergers make companies generate a lot
more profits which are eventually utilized in development projects and scientific research
programs aimed at boosting the performance of a company. When companies realize profits
acquired from merging between one another, it is a way of raising funds for development
projects for individual firms.
The evidence I found is to support my point are the examples of actual companies that
merged and have since made tremendous profits since like Bank of America and MBNA,
Disney and Pixar just to mention a few.
Referencing the sample companies mentioned above and using Disney and Pixar as an
example, Pixar figured that the merge will benefit them considering Disney is a strong brand
that was well known and had established marketing strategies that are working just fine
making them a billion dollar brand. "Our partnership with Disney has probably been the most
successful partnership in Hollywood history, and it's been the best thing that ever happened
for Pixar. We wouldn't be here today without it"- Steve Jobs. Also, in the case of Bank of
America and MBNA the merger created one of the greatest credit card portfolios. "Both
companies benefit as cross-sell opportunities exist to sell MBNA products to Bank of
America customers and Bank of America products to MBNA customers".
Mergers allow for a collaborative interaction between parties involved; something that is not
common with acquisitions. Collaboration required working together on all fronts from their
intents, to financials to risk and the final goal.
The evidence I found to support this point indicates that collaboration is one of the most
powerful tool that can be utilized during a merger to overcome the challenges that come with
Mutual collaboration helps create a union between the two parties that are strengthened in
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