The higher valuation of the bidders, compared to the true value of the target, would not have been made by rational bidders. Thus, managerial motives are important determinants for the outcome of the M&A as manager may act to maximize their own utility and engage in ‘empire building’ (Trautwein, 1990) instead of their shareholders’ value. Managers may invest the free cash flow in projects such as acquisitions with negative net present value if that would lead to increased personal utility rather than maximize shareholder value. These free cash flows, which are generally found in the reserves, should rather be paid out as to shareholders in the form of dividends if the firm is to be effective and to maximize the stock price (Jensen,
Exports of mining, petroleum, and infrastructure equipment may help multinational corporations and developed countries access cheaper raw materials, with few benefits for the residents of developing countries. Changes will help increase imports, but in return will drain the treasuries and currency reserves of developing countries and create heavy debt burdens. Question #2: The Ex-Im Bank will provide innumerable federal programs for the subsidized U.S. companies which will include financing and insurance (Ball, Geringer, McNett, and Minor, (2013), pg. 351). Many U.S. companies claim to oppose foreign assistance linked to
Third, the argument could be misused because there are too many uncertainties, as indeed the industry could grow up, or not. And its cost could decrease, for sure or increase. This is too speculative. 2- Questions #6, What is the national defense argument for putting up barriers to imports? Why is import protection probably not
1. What is the most compelling justification for attempting to calculate a return on marketing investment? a. The most compelling justification for attempting to calculate a Return on Marketing Investment (ROMI) is the discontent with traditional metrics, which does not allow managers to assess the future performance of their firm at any moment. While the traditional accounting methods are good to measure past performance and financial stature, it does not allow for managers to see the impact or value that marketing has on the bottom line.
The international context appears to possess the information on high quality standards (Schroeder, Clark, & Cathey, 2011). The legal and institutional obstacles that are inhibit by the foreign countries. This includes private litigations against the foreign firms. Next reason is the United States will not compare to the foreign country is the politics. There are different thought processes from the foreign countries, which include the socialist, the democratic, and the totalitarian in how the cash should be spent and separated (Schroeder, Clark, & Cathey, 2011).
Argentina Currency Peg Question 1: Discuss the possible risks of the U.S. dollar peg. What are the advantages and disadvantages of such a policy? Answer: High dependence on foreign currency and economy may cause threat in economic development for nation after pegging its currency to US dollars. Other risk of pegging could be, it strengthen the belief of incompetency of financial structure of Argentina among investor. Advantage: * Stabilize currency fluctuation * Reduction in administrative expenses: cost of managing infrastructure to maintain currency is reduced * Domestic financial institutions try improve their quality and efficiency of service as it means financial integration with the United States * No need to invest heavily in efforts to build market confidence in its own monetary policy as pegging creates a stable relationship with a currency whose reputation is already well established and secure.
It cannot affect the amount of the firm's operating income that goes to taxes. c. It makes it more difficult for the firm to raise additional capital. d. It makes the firm's investors subject to greater potential personal liabilities. e. It makes it more difficult for the firm's investors to transfer their ownership interests. 2.
Democratic capitalist countries do not benefit from expansionist policies. Also, their citizens are gainfully employed and busy themselves producing, which implicitly keeps them away from jingoism. Machiavelli has a different argument. He claims that republics are actually quite good and useful at pursuing expansionist policies. Machiavelli does not advocate radical democracy; that he believed would eventually digress into tyranny.
The other option which is full advance payment will be too risky for the buyer (Yusuf), because of transactions risks in contracts such as: shipping risks or seller non compliance risk. Therefore, it was a right desicion made by Ferro Industries do not ask for a full advance payment upfront.The third option which is delayed payment is not the right choice for the Ferro Industries. However, despite all the risks with this type of payment when it comes to conduct an international business in the world wide competition it is could be acceptable. 3. Evaluate the role of trust vs. contracts in international customer relationships.
Question 1 No I do not believe that Evo’s decision to not set up overseas is a good idea. There is quite a bit of missed potential business not setting up international. Yes, it is highly expensive setting up an international business, but the revenue could make that up in a short amount of