Use the Internet or Basic Search: Strayer University Online Library

 

Use the Internet or Basic Search: Strayer University Online Library  to research two publicly traded U.S. companies and download their  financial statements. Assume that you are the CEO of one of the selected  companies. You are responsible for gaining control over the other  company.

You have three choices, any of which you believe that the board of directors will support:

  • Choice 1: Your company acquires 35 percent of the voting stock of the target company.
  • Choice 2: Your company acquires 51 percent of the voting stock of the target company.
  • Choice 3: Your company acquires 100 percent of the voting stock of the target company.

Instructions

Write a 4–5 page paper in which you:

  • Provide a brief background introduction to both the company  that you are working for and the company you are responsible for gaining  control over.
  • Specify the overall manner in which the acquisition fits into your company’s strategic direction.
  • Identify at least three possible synergies that could occur as a result of the proposed acquisition.
  • Select two out of the three choices provided in the scenario  and analyze the key accounting requirements for each of the two choices  that you selected.
  • Suggest one strategy with which you would prepare the financial  statements for your company after the acquisition under each of the two  choices.
  • Select the choice that you consider to be the most advantageous  to your company. Explain to the board of directors at least three  reasons why your selected choice is the most advantageous to the  company.
  • Assume that two years after the acquisition, your board of  directors wants to offer the shares back to the public in hopes of  making a large profit. Assume that in each of the two years your company  and the target company have had the same reported net income as they  did in the year of acquisition. Determine the type of value (that is,  cost of fair value) that you would use to report the subsidiary’s net  asset in the subsidiary’s financial statements, which the company will  distribute to the public with the public offering. Provide support for  your rationale.
  • Use Basic Search: Strayer University Online Library to find at least three academic resources. 
  •  Note: Wikipedia and similar websites are not considered quality references. 
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