Corporation acquisitions - Assignment Example

Corporate Acquisitions ID Lecturer The reason why firms purchase other corporations is because theybelieve that the other corporation shall help them in profit maximization and increase in revenues for a period of time. It helps them establish their basis within the pertinent market domains, and assist in exponentially enhancing their market share within the related market terrains. At times, firms pay just too much to acquire other corporations (Gaughan 1999). At other times, the costs for acquiring corporations is just reasonable, however this hardly happens and the firms end up paying a lot of money to purchase other corporations which shall be the cornerstone of their own success in the future.

Shareholder losses happen when firms are acquired because acquisitions have not been planned as such in the past and hence there are no forecasts that are done prior to acquiring new corporations (Scott 1994). Shareholder losses usually mean a great amount of distress for the people who invest a great deal within these firms who now have gone ahead and decided to acquire new corporations. The fundamentals of corporate acquisitions have focused a great deal on how different avenues of corporate success have been envisaged and how these bring in value and the expected returns for the sake of the firms which have expansion desires (Schnee 2004).

In essence, corporate acquisitions are usually seen with a skeptical viewpoint because these are at times very diabolical in nature and do not always bring in the desired value in terms of financial success that a firm might have thought into in the past. References Gaughan, P (1999). Mergers, Acquisitions, and Corporate Restructurings. Wiley Schnee, E (2004). Corporate Acquisition Expenses. Journal of Accountancy, Vol. 197 Scott, C (1994). Corporate Control and Accountability: Changing Structures and the Dynamics of Regulation.

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