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Pages:
4 pages/β‰ˆ1100 words
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Check Instructions
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Research Paper
Language:
English (U.S.)
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Date:
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Topic:

Business Acquisitions. Accounting, Finance, SPSS Research Paper

Research Paper Instructions:

Write a four to five (4-5) page paper in which you:
Provide a brief background introduction on both the company that you are working for and the company that you are responsible for gaining control over.
Specify the overall manner in which the acquisition fits into your company’s strategic direction. Next, identify at least three (3) possible synergies that could occur as a result of the proposed acquisition.
Select two (2) out of the three (3) choices provided in the above scenario and analyze the key accounting requirements for each of the two (2) choices that you selected. Next, suggest one (1) strategy with which you would prepare the financial statements for your company after the acquisition under each of the two (2) choices.
Select the choice that you consider to be the most advantageous to your company. Explain to the Board of Directors at least three (3) reasons why your selected choice is the most advantageous to the company.
Assume that two (2) 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 (2) 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 (i.e., 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 at least three (3) quality academic resources in this assignment. Note: Wikipedia and similar websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
This course requires use of new Strayer Writing Standards (SWS). The format is different than other Strayer University courses. Please take a moment to review the SWS documentation for details.
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow SWS or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Examine the various methods of accounting for an investment in equity shares of another company.
Analyze the accounting requirements for consolidated financial information on the date of acquisition and subsequent to the date of acquisition.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following ru

 

 Business Acquisitions  to research two (2) 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 (3) choices, any of which you believe that the Board of Directors will support.  Choice 1: Your company acquires 35% of the voting stock of the target company. Choice 2: Your company acquires 51% of the voting stock of the target company.  Choice 3: Your company acquires 100% of the voting stock of the target company. 

Research Paper Sample Content Preview:

Business Acquisitions
Student’s Name:
Professor’s Name:
Course Title:
Date:
Background
The company in question is IBM, an American multinational technology company with its headquarters located in Armonk, New York. It deals with selling computer hardware, software, and middleware providing hosting and consulting services. The company has also invested heavily in research in areas ranging from mainframe computers to nanotechnology which has enabled it to hold the record for most patents by a business in the United States. CITATION Joh191 \l 1033 (Teltsch, 2019) The company being acquired is Red Hat, an American company that deals with the provision of open-source software to companies and corporations. The company had made acquisitions of open-source enterprise middleware vendor JBoss meaning the subsidiary company will be massively beneficial to IBM.
Strategic decision.
The $34 billion acquisition of Red Hat is a statement of how valuable the company will be to IBM. Also, it is no secret that the majority of businesses have started moving towards a hybrid cloud. A hybrid cloud allows a company to benefit from on-premise computing while also having the flexibility and cost savings of the cloud. IBM has been a player in the cloud market but it is still a distant fourth behind heavyweights such as Amazon AWS, Microsoft Azure, and Google Cloud. The acquisition of Red Hat intends to close that gap by transforming the company from its current mainframe-centric orientation to becoming a top tier hybrid cloud provider.
Synergies
* Stronghold.
The consensus is that the technology industry is changing and IT buyers are increasingly favoring hybrid cloud-based models. This is because it enables them to marry their existing on-premise assets with the public cloud resource. In a market that is vying for public cloud dominance, the acquisition of Red Hat means that IBM has strengthened its competitiveness. CITATION Joh191 \l 1033 (Teltsch, 2019)
* Partner Connections.
IBM and Red Hat partners will use Business Partner Connect to bring up opportunities for collaborations and business developments. This will strengthen the company’s partner ecosystem and help double down on cloud skills. Red Hart partners will be encouraged to work with IBM partners in coming up with compelling IBM-Red Hat hybrid cloud solutions for the customers.
* IBM + Red Hat Run books
The acquisition of Red Hat will not have an immediate impact on the market share of IBM. However, it does address a complex issue of hybrid cloud deployment and management. CITATION Car18 \l 1033 (Donnelly, 2018) Having Red Hat is therefore an advantage for IBM and it places the company with an incredible potential of earning revenue from professional services.
The 2 Scenarios.
* 35% of the voting stock
This is an equity method acquisition of treating equity investments for associate companies. The investor in this case views such equities as assets which means the associate company’s shares and net income will increase together with investments. A net loss or proportional payment of dividends consequently means a decrease in investment. Therefore, IBM will have enough voting rights to vote in candidates to the board...
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