research two (2) publically traded U.S. companies, accounting homework help

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Business Finance

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Use the Internet or Strayer library to research two (2) publically 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, either 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.

Write a four to five (4-5) page paper in which you:

  1. 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.
  2. Specify the overall manner in which the acquisition fits into your company’ strategic direction. Next, identify at least three (3) possible synergies that could occur as a result of the proposed acquisition.
  3. 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 in which you would prepare the financial statements for your company after the acquisition under each of the two (2) choices.
  4. 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.
  5. Assume 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 exactly the same reported net income as they did in the year of acquisition. Determine the type of value, (e.g., 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.  
  6. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA 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.
    • Use technology and information resources to research issues in advanced accounting.
    • Write clearly and concisely about advanced accounting using proper writing mechanics.

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    Explanation & Answer

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    Running Head: Acquisitions

    1

    Assignment Title: Business Acquisitions
    Student’s Name
    Course Title
    Instructor’s Name
    Date

    Acquisitions

    2

    Introduction
    In my analysis, I will use Target Inc. and Walmart Inc. Of these two giants, Walmart Inc.
    Leads Target Corporation in both revenue and size. Assuming I am the CEO of Walmart, I will
    be interested in increasing the size of this venture in order to gain a wider market share,
    consequently increasing the revenue of my own company. Despite the recent promising
    performance of my business, I want to get control over my competitor Target Inc. to increase my
    overall size. There are three available choices which I have to understand fully. I would either
    gain 100% voting stock, 51% voting stock or just 35% of the voting stock to exert my control
    over my immediate rival.
    Company Background
    Wal-Mart Stores, Inc.
    Walmart Inc. Is a USA based venture. It has retail stores all over the world, housing
    discount departmental stores, grocery stores, and hypermarkets. It attributes its current success to
    Sam Walton, who founded the venture on July 2, 1962. Since that period, the corporation has
    tremendously grown to spread out of its initial location at Rogers, USA. The venture has its
    capital at Bentonville, Arkansas. The company has grown tremendously and currently has
    111620 stores as on December 31st, 2015. It has operations in 28 nations.
    The venture operates under 65 banners in diverse countries such as Mexico. With 52% of
    the company’s share, Walton’s family remains the legitimate owners of the firm Doug McMillon
    is the current CEO of this fi...


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