Problem Solution: Lester Electronics

Lester Electronics is a consumer and electronics parts distributor, marketing its products to original equipment manufacturers (OEM). For many years, the Shang-wa residential area has been in an exclusive supply agreement with Lester electronics. Currently, the CEO of Shang-wa is exploring the disaster of retiring, to that end, there is no formal succession plan for the companionship should the CEO retire.. At the same time, Shang-wa is being pursued for a take everywhere by Transnational Electronics Corporation (TEC), other electronics social club who would benefit from the spinal fusion with Shang-wa. both(prenominal) Shang-wa and Lester companies are upset over the putsch possibility. Should the hostile takeover take place, Lester would lose 43% of their revenues and Shang-wa as a supplier. Lester Electronics is in addition being pursued for a possible takeover by Avral Electronics. After a coalesced analysis, both Lester and Shang-wa agree that a merger between the devil companies would be the best theme to maintain their relations and rhythm off takeover attempts by the two other companies (University of Phoenix, 2006). integrate Lester and Shang-wa would be the best air to increase their shareholder?s wealth. After such a merger, Lester would take a shit a international front man and increase their market standing. There are, however, several issues that Lester entrust drive to address as a result of the merger.

incommode and luck IdentificationThe first issue that Lester will convey to passel with is to determine if they have the financial capacity to complete the merger with Shang-wa. Lester?s financial managers should evaluate their cash flows to see if they have the ca! pital to both buy Shang-wa using the equity that they already have or to finance the bargain for with debt. During this evaluation, Lester should evaluate the measure of the cash flows. If Lester decides to purchase Shang-wa using any debt, the financial managers will... If you take to get a full essay, order it on our website: OrderEssay.net

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