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Control Premium
A control premium is an amount that a buyer is sometimes willing to pay over the current market price of a publicly traded company in order to acquire a controlling share in that company. If the market perceives that a public company's profit and cash flow is not being maximized, capital structure is not optimal, or other factors that can be changed are impacting the company's share Overview of concept Transactions involving small blocks of shares in public companies occur regularly and serve to establish the market price per share of company stock. Acquiring a controlling number of shares sometimes requires offering a premium over the current market price per share in order to induce existing shareholders to sell. It is made through a tender offer with specific terms, including the price. Higher control premiums are often associated with classified boards. The amount of control is the acquirer's decision and is based on its belief that the target company's share price is not opti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
NYU Journal Of Law & Business
The New York University School of Law (NYU Law) is the Law school in the United States, law school of New York University, a Private university, private research university in New York City. Established in 1835, it was the first law school established in New York City and is the oldest surviving law school in New York (state), New York State and one of the oldest law schools in the United States. Located in Greenwich Village in Lower Manhattan, NYU Law grants Juris Doctor, J.D., Master of Laws, LL.M., and J.S.D. degrees. In , NYU Law's bar passage rate was 94.9%, the sixth-highest in the United States. History New York University School of Law was founded in 1835, making it the oldest law school in New York City. It is also the oldest surviving law school in New York (state), New York State and one of the oldest in the United States. The only law school in the state to precede it was a small institution conducted by Peter van Schaack in Kinderhook (town), New York, Kinderhoo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Harvard Business Law Review
The ''Harvard Business Law Review'' (''HBLR'') is a bi-annual legal journal published at Harvard Law School Harvard Law School (HLS) is the law school of Harvard University, a Private university, private research university in Cambridge, Massachusetts. Founded in 1817, Harvard Law School is the oldest law school in continuous operation in the United .... It covers subjects including: corporate governance, securities law, capital markets, financial regulation and institutions, financial distress and bankruptcy, and related subjects. While being run and published by students, the ''Harvard Business Law Review'' has an advisory board consisting of a number of tenured Professors at Harvard Law School, including Lucian Bebchuk, Mark J. Roe, Guhan Subramanian, and also practitioners, including Paul N. Watterson, Jr., Elizabeth M. Schubert, and Warren Motley. The current Editors in Chief are Joseph Ravenna IV and Savannah Huitema. References Harvard Business School ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Synergy
Corporate synergy is a financial benefit that a corporation expects to realize when it merges with or acquires another corporation. Corporate synergy occurs when corporations interact congruently with one another, creating additional value. Synergies are divided into two groups: operational (revenue enhancement and cost reduction) and financial (decrease in cost of capital, tax benefits). Seeking for synergies is a nearly ubiquitous feature and motivation of corporate mergers and acquisitions and is an important negotiating point between the buyer and seller that impacts the final price both parties agree to; see . The synergy value should not be confused with the control premium; these metrics should be calculated separately. Positive synergies arise when the combined corporation will bring about better results than the two independent corporations, as in the saying "the whole is better than the sum of the parts". If the corporations do not do due diligence, negative synergie ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Opportunity Cost
In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone where, given limited resources, a choice needs to be made between several mutually exclusive alternatives. Assuming the best choice is made, it is the "cost" incurred by not enjoying the ''benefit'' that would have been had if the second best available choice had been taken instead. The '' New Oxford American Dictionary'' defines it as "the loss of potential gain from other alternatives when one alternative is chosen". As a representation of the relationship between scarcity and choice, the objective of opportunity cost is to ensure efficient use of scarce resources. It incorporates all associated costs of a decision, both explicit and implicit. Thus, opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone, lost time, pleasure, or any other benefit that provides utility should also be considered an opportunity cost. Types Expl ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Shareholders' Protection
Shareholders' protection is a contingency process detailing what will happen to a shareholder's shares if the shareholder dies or becomes seriously ill. In the interests of financial security, business stability, and continuity – particularly for private limited companies where there may only be a small number of principal shareholders – it is essential to provide a safety net following the loss of a shareholder: * Shares may go to the deceased’s family, which has no interest in the business and would prefer a cash sum * The company or other shareholders will want to retain control by buying lost shares – but may not have the resources to do so * The shares may be taken over by someone who does not share the company’s objectives – and may even be a competitor References Corporate law Protection {{Law-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
EBITDA
A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, pronounced ) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base. It is derived by subtracting from revenues all costs of the operating business (e.g. wages, costs of raw materials, services ...) but not decline in asset value, cost of borrowing and obligations to governments. Although lease have been capitalised in the balance sheet (and depreciated in the profit and loss statement) since IFRS 16, its expenses are often still adjusted back into EBITDA given they are deemed operational in nature. Though often shown on an income statement, it is not considered part of the Generally Accepted Accounting Principles (GAAP) by the SEC, hence the SEC requires that companies registering securities with it (and when filing its periodic reports) reco ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
EV/EBITDA
Enterprise value/ EBITDA (more commonly referred to by the acronym EV/EBITDA) is a popular valuation multiple used to determine the fair market value of a company. By contrast to the more widely available P/E ratio (price-earnings ratio) it includes debt as part of the value of the company in the numerator and excludes costs such as the need to replace depreciating plant, interest on debt, and taxes owed from the earnings or denominator. It is the most widely used valuation multiple based on enterprise value and is often used as an alternative to the P/E ratio when valuing companies believed to be in a high-growth phase, and thus credits enterprises with higher startup costs, high debt relative to equity, and lower realised earnings. Use A key advantage of EV/EBITDA is that it is independent of the capital structure (i.e. the mixture of debt and equity). Therefore this multiple can be used to compare companies with different levels of debt. It also avoids the significant shortc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Enterprise Value
Enterprise value (EV), total enterprise value (TEV), or firm value (FV) is an economic measure reflecting the market value of a business (i.e. as distinct from market price). It is a sum of claims by all claimants: creditors (secured and unsecured) and shareholders (preferred and common). Enterprise value is one of the fundamental metrics used in business valuation, financial analysis, accounting, portfolio analysis, and risk analysis. Enterprise value is more comprehensive than market capitalization, which only reflects common equity. Importantly, EV reflects the opportunistic nature of business and may change substantially over time because of both external and internal conditions. Therefore, financial analysts often use a comfortable range of EV in their calculations. EV equation For detailed information on the valuation process see Valuation (finance). : Enterprise value = :: common equity at market value (this line item is also known as "market cap") :: + debt at mar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Business Valuation
Business valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Here various valuation techniques are used by financial market participants to determine the price they are willing to pay or receive to effect a sale of the business. In addition to estimating the selling price of a business, the same valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes such as in shareholders deadlock, divorce litigation and estate contest. Specialized business valuation credentials include the Chartered Business Valuator (CBV) offered by the CBV Institute, ASA and CEIV from the American Society of Appraisers, and the Certified Valuation Analyst (CVA) by the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Divestment
In finance and economics, divestment or divestiture is the reduction of some kind of asset for financial, ethical, or political objectives or sale of an existing business by a firm. A divestment is the opposite of an investment. Divestiture is an adaptive change and adjustment of a company's ownership and business portfolio made to confront with internal and external changes. Motives Firms may have several motives for divestitures: # a firm may divest (sell) businesses that are not part of its core operations so that it can focus on what it does best. For example, Eastman Kodak, Ford Motor Company, Future Group and many other firms have sold various businesses that were not closely related to their core businesses. # to obtain funds. Divestitures generate funds for the firm because it is selling one of its businesses in exchange for cash. For example, CSX Corporation made divestitures to focus on its core railroad business and also to obtain funds so that it could pay off s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Equity Value
Equity value is the value of a company available to owners or shareholders. It is the enterprise value plus all cash and cash equivalents, short and long-term investments, and less all short-term debt, long-term debt and minority interests. Equity value accounts for all the ownership interest in a firm including the value of unexercised stock options and securities convertible to equity. From a mergers and acquisitions to an academic perspective, equity value differs from market capitalization or market value in that it incorporates all equity interests in a firm whereas market capitalization or market value only reflects those common shares currently outstanding. Calculating equity value Equity value can be calculated in two ways, either the intrinsic value method, or the fair market value method. The intrinsic value method is calculated as follows: Equity Value = Market capitalization + Amount that in-the-money stock options In finance, an option is a contract which ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Goodwill (accounting)
In accounting, goodwill is an intangible asset recognized when a firm is purchased as a going concern. It reflects the premium that the buyer pays in addition to the net value of its other assets. Goodwill is often understood to represent the firm's intrinsic ability to acquire and retain customer firm or business. Under U.S. GAAP and IFRS, goodwill is never amortized for public companies, because it is considered to have an indefinite useful life. On the other hand, private companies in the United States may elect to amortize goodwill over a period of ten years or less under an accounting alternative from the Private Company Council of the FASB. Instead, management is responsible for valuing goodwill every year and to determine if an impairment is required. If the fair market value goes below historical cost (what goodwill was purchased for), an impairment must be recorded to bring it down to its fair market value. However, an increase in the fair market value would not be ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
