Explain the concepts of Mergers, Aquisition And
Amalgamation?
- 3 Answers
- 8617 Views
- I also Faced
- E-Mail Answers
Answer Posted / jp morgan
Merger: When two or more companies agree to combine,in a
consensus to do the business
Example:AOL/Time Warner and Daimler/Chrysler
Acquisition: Buyout/Takeover of one business entity by
another. Could be non-consensus too
Example: Oracle acquires people soft
Amalgamation: When two or more business units combine and
pool their resources to form a new separate entity.
Example:Amalgamation of Bank of Punjab and Centurion Bank
resulting in formation of Centurion Bank of Punjab
| Is This Answer Correct ? | 6 Yes | 1 No |
Post New Answer View All Answers
What do you understand by CSR?
What Entry Will Be Passed When Debentures Are Issued at Premium?
What do you know about E- Commerce? Name a few companies that deal in it.
What is Subsidiary Company?
How can rural employment be increased?
Read the case given below and answer the questions given at the end. Krutika Designers Ltd is an Indian company engaged in designing shirts for an international shirt manufacturer. Its operations are currently restricted to designing shirts for the Indian market. The firm is interested in extending its operations to the European markets, but is restricted by its lack of knowledge about the latest fashions and trends prevailing there. Hence, the firm has decided to open an office in Finland for establishing a network in Europe that will give the firm access to the needed information. The firm feels that its does not have the capability of sustaining itself in the foreign markets in the long-term, and will be able to generate additional revenue from these activities only for the next 5 years. After that, the Finnish office will have to be closed down. The firm anticipates an initial investment of Rs.14 million. The project is expected to generate the following cash flows over the 5 years period. Year Cash flow (Finnish Marks) 1 2 3 4 5 10,00,000 20,00,000 50,00,000 50,00,000 30,00,000 These cash flows are expressed in terms of today’s money. The firm can claim depreciation in India according to the Straight Line Method. The salvage value from the project is expected to be nil. The Finnish Government does not provide any incentives for foreign investments. However, currently it is making an attempt to have better economic ties with India. Hence, it has decided to extend a loan of 50,000 marks to Krutika Designers. The loan will be at a concessional interest rate of 7%. The loan is to be repaid in 5 equal annual installments which will include the interest payments. The project will generate additional borrowing capacity of Rs.5 million for the firm. However, as the firm does not have any firm contract with the international shirt manufacturer, its domestic revenues are expected to be very volatile. Therefore, there is no surely that the firm will be able to absorb the tax benefits arising out of depreciation and additional borrowing capacity. The firm does not intend to indulge in any illegal money transfers. The current spot rate for the Finnish Mark is Rs.7.25/FM. The inflation rates in India and Finland for the next 5 years are expected to be 8% and 3% respectively. The exchange rate is expected to move in tandem with the inflation rates. Indian tax rate is 35% while Finnish tax rate is 40%. India and Finland have entered into a tax treaty whereby the earnings of the residents of one country are taxable in that country only. In India, the nominal risk-free interest rate is 11%. The same is 6% in Finland. The Indian nominal interest rate (including risk-premium) is 15%, while that in Finland is 9%. The nominal all-equity rate in India is 18%. 1. Comment on the financial viability of the project. 2. What are the different circumstances in which nominal all-equity discount rate and real all equity discount rate should be used for discounting the cash flows? Explain the rationale behind it. 3. Comment on the financial viability of the project if the firm is sure about being able to absorb the tax benefits arising out of depreciation and increased borrowing capacity. 4. Explain the concept of exchange risk and how it affects an international project. 5. How can the financial structure of a project be used to overcome repatriation restrictions? What are the additional benefits of such maneuvers?
Is there any relations in between Sensex and foreign currency values? like if the sensex increased then the value of Rs goes up over USD (United state doller)?
What's Credit card?
State some points of Union Budget 2017?
What is the scope of finance function?
Regarding export, We have Excisable goods for Export, issuing Form ARE1 (Annexure-1), If we'll pay Excise Duty with adjustment from our accumulated of cenvat and "Claim for rebate of Duty paid on goods exported."/ CE Rule 18 Which type shipping bill should be file for "Claim for rebate of Duty paid on goods exported. .......Plz advise now can we also get DBK all industry rate? Motive: To reduce the accumulation of heavy cenvat To claim the refund of duty drawback, duty paid on raw material components, parts, packing material & others applicable inputs under Section 4A of valuation act. FYIP, We are registered with deptt. of excise and availing the cenvat on all inputs. Availing facility of CENVAT credit under CENVAT credit rules, 2002
How will you define growth and development?
What is 'stagflation'?
How To Create A Organizational Group?
When Shares Are Allotted to Shareholders at Par What Entry Will Be Passed?
