Managing Growth, Global Operations, and Communications (Including Mergers, Acquisitions, Valuation, and External Relations)
An important outcome for this week is to demonstrate understanding of the reasons for corporate mergers, acquisitions, and divestitures and how to evaluate corporate restructurings.
Students are expected to learn how to demonstrate proficiency in valuation methods including discounted cash flow and valuation by comparables (relative valuation). This includes learning how to explain the calculation of free cash flows for a target company and how to estimate the company’s intrinsic value based on discounted cash flow (DCF) flow analysis.
Another important outcome is learning how to explain the Pre-Offer and Post-Offer takeover defense mechanisms that can be deployed by takeover targets.
It is expected that students will learn how to explain and evaluate the forms of payment and methods of financing normally used for corporate mergers and acquisitions.
Students will learn about the HHI (Herfindahl-Hirschman Index, commonly accepted measure of market concentration) as the measure of market power used by regulators to assess potential antitrust violations.
Discuss the reasons for and the methods of corporate restructuring including bankruptcy and liquidation; explain Chapter 7 and Chapter 11 bankruptcy reorganizations.
It is expected that students will be able to explain how Altman Z analysis is utilized to predict bankruptcy potential. It is necessary to learn how to make and interpret the related calculations.
It is anticipated that students will be able to discuss and assess the role of international acquisitions as a growth strategy and the factors motivating such takeovers.
For a review of the Herfindahl-Hirschman Index, a measure of industry concentration, refer to: