Gap Analysis: Lester Electronics

snap Analysis: Lester Electronics University of Phoenix August 30, 2008 Maximizing Shargonholder Wealth- MBA/540r4 Gap Analysis: Lester Electronics In 1978 Lester Electronics, Inc. ( chaplet) entered into an agreement with Shang-wa Electronics under exclusive optical condenser distribution contract (Scenario One, 2008). The agreement has been in effect for 35 years proving beneficial to both parties. Due to recent events, LEI is pursuing a merger with Shang-wa and depart be quest appropriate methods of financing the venture. With the completion of the merger LEI and Shang-wa will establish a combined financial and corporate inaugural that would include maximizing shareholder range simultaneously skirmish to the needs of customers, suppliers, and employees. This paper will discuss the facets of this merger which moldiness be evaluated and adjusted to maximize shareholder wealth season assess financing needs for wealth maximization, while identifying middling term financing alternatives and analyzing financing instruments. Situation Analysis Issue and chance Identification LEI specializes in the distribution of capacitors and Shang-wa specializes in the production and manufacturing of capacitors.

The coordination of these almost related activities is referred to as vertical integration of economies (Ross, et al, p. 803). Several opportunities and risks are ssociated with mergers. Mergers are less expensive avoiding legal and accounting difficulties til now mergers must be approved by the stockholders of each company. The appraise and accounting issues fostered in a merger include the attribute and amount of taxes being dependent on the value of the acquired libertines assets. Revaluing the acquired firms assets to obtain equal value to the acquiring firm is favorable to avoid the capital gains tax. revenue reduction methods due to net operating loss and other(a) tax benefits are also available as follow reductions. (Ross, et al,2005, ch. 29). The merger should hope to... If you want to get a sufficient essay, order it on our website: Orderessay

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