The researcher of this following work aims to look at what merging is, its disadvantages or problems and its benefits from a perspective of corporate governance. Merging is aimed at making financial gain to the parties involved…
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This is whereby the firm is able to bargain and receive discounts on the account that it is able to buy more at once. Since the firm has the capability of buying large stocks at a go those involved are able to negotiate easily in terms of buying price. The firm will later sell at a higher price that will result in the making of profits within it. There is combining of complementary resources. For instance, these two firms were complementing each other in terms of resources and in exchange both get money, that will now be over and the acquiring company will not pay any individual. If Frankfurt stock exchange took over the London stock exchange, this simply means that it will not be incurring the expenses for the complementary services it used to receive from the London counterpart. Another advantage is garnering tax advantages. In this context the, only the acquisition firm will pay tax. Conversely, the acquired firm will not pay any tax. Therefore, this means that expenses towards taxes will reduce and hence more money is left that will be counted as profit for the firm. There is also the advantage of elimination of inefficiency within the firms. Merging may mean acquiring the best employees who would carry out their duties efficiently and this may eliminate ineffectiveness that is associated with losses. This will result into more profits being made by the firm. Merging may also lead to purchasing customers and therefore increasing market share. This will directly translate to increased sales and hence more profits since the completion has been eliminated and activities are being done jointly. Subsequently, merging may enable the firm to obtain any proprietary rights that are associated with goods and services of another company. For instance if the London based...
The intention of this study is corporate governance, a broad term that encompasses many aspects as concerns the business. It may be said to be the way in which any business that exists is run and conducted and includes the rules and laws by which the partners of the firms must abide which are not a choice but an obligation. Any firm constitutes stakeholders who may be the management, directors and shareholders. Within them, a relationship is simply corporate governance. It also may mean the structuring of the objectives and goals of the firm and how to achieve them. All these are aimed at creating business merger or simply a takeover. A merger occurs one firm presupposes all the liabilities and all the assets of another company. This is usually aimed at a financial gain to the acquisition firm. Usually the acquiring firm retains its name while the acquired firm is eliminated and thus no longer exists as a firm or an entity. There exist many advantages of making a merger in the business world. These advantages are all directed at making financial gains. This has been prompted by the high competition that exists in the market. Therefore, firms seek to have a bigger market shares that will definitely translate to higher profits and hence financial gains. In as much as the merging process looks and in that matter seems profitable, it has gotten disadvantages that represent the negative part of it. Therefore, such issues though few, they may never be ignored. Among them is that there may be overestimation associated with the valuation progression.
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(“Corporate Governance Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
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(Corporate Governance Essay Example | Topics and Well Written Essays - 1000 Words)
“Corporate Governance Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1394477-corporate-governance.
12). The said stakeholders are similar to those of the first definition, as they include shareholders, management, and members of the board of directors, employees, customers, suppliers, creditors, and other interested parties. The definition given by the World Bank differs from the above two in that it includes the role of regulations and laws, as it defines corporate governance as a blend of law, regulation and appropriate voluntary, private sector practices enabling a corporation to attract financial and human capital, increase efficiency and fulfil its goals by generating long-term economic value for shareholders and respecting the interests of stakeholders and society (Maassen, 2002, p.
Companies in recent years started giving greater emphasis on effective governance with a view to ensure competitive position, attract sufficient capital, guarantee sustainability, and combat corruptions. Corporate governance practices are associated with the development of financial markets, because higher level of governance in most countries are related to larger securities markets and lower costs of external finance (Tang and Wang, 2011, 47).
The interests of various stakeholders and shareholders were compromised by the vested interests. Roberts, McNulty and Stiles (2005) have emphasized the importance of board members of the company who are endowed with huge powers that could be easily misused.
With respect to this, it ensures that the business is conducted in accordance to ethics. Such principles should be adhered to in the decision making process while giving the right honors to the laws of the land. Fundamentally, people develop a lot of confidence and would wish to be associated with an organization that is perceived to be practicing good corporate governance.
y Board follows the principle of the corporate governance guidelines which states that the company is headed by the board and this effective board as a whole is responsible for the success of the company.
The Board is actually the representative of the shareholders and acts on
The introduction section gives general principles and concepts about corporate governance. The main body of the paper carries out a comparison of the UK and the US corporate governance models. It is divided into
Nonetheless, these controls may add the scope for abuse and managerial discretion. This paper is an integrative essay that looks at corporate governance from the perspective of two separate articles.
Corporate governance can be understood through various frameworks of the firm. Agency theory is one of those frameworks, and entails the separation of ownership and control of an organisation. In this case,
More importantly, the chapter dwells on the procedures and methodologies that will be involved in working on the paper. 21
Corporate governance in general has become the new crucible in which corporations are tested and declared worthy of the trust of
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