--%>
Assignment Help - homework help

Financial problem regarding acquistion of company

My Company paid an extremely higher price for the acquisition of other company; the price was recommended through the valuation of an investment bank. Now we have financial problems. So is there any way to make this bank legally responsible for such situation?

E

Expert

Verified

I must say no. The investment bank does a valuation as per to the expected value of the flows the company could produce and its risk. What an investment bank gives is a valuation and not a “price of valuation.” There responsibility for the price lies along with the company that realizes the offer.

To assign a valuation a frequent error is to an investment bank without getting involved and only waiting for the valuation report. Evidently, such a valuation considers only the value of the company as per to the investment bank’s forecasts upon the economy, the company and the sector and according to the risk estimation of the company, also realized through the investment bank. A helpful and relevant valuation to the executives of a company depends upon the expectation of these executives.

   Related Questions in Corporate Finance

  • Q : Convertible Bonds-Corporate Bonds State

    State the term Convertible Bonds in Corporate Bonds?

    		•
  • Q : Assignment help for Financial Statement

    HW I: Show your approach to each problem (formulas, variables, etc.) You can use Excel sheet formulas to show the work or use the Finance calculator terms. For the ABC answers: choose the correct answer and delete the rest.

  • Q : WCR lower cost of storage Inventory is

    Inventory is an important part of WCR estimation. It is a current asset, which depletes over period of time. Also, it requires creation of facility, which would help in storing the inventory and estimate the associated cost of maintaining and transporting it. The esti

    		•
  • Q : Earnings management What do you mean by

    What do you mean by Earnings management and what are their actions and activities?

    		•
  • Q : What is the value of stock Brushy

    Brushy Mountain Mining Company's ore reserves are being depleted, so its sales are falling. Also, its pit is getting deeper each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 5% per year. I

    		•
  • Q : PV of Dividends PV of dividends:

    PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next five-year period if the required rate of return is 10 percent?

    		•
  • Q : Valuation & Merger analysis Problem

    Problem 21-1 Valuation Harrison Corporation is interested in acquiring Van Buren Corporation. Assume t

    		•
  • Q : Road King Trucks Project I want to know

    I want to know how much do you charge for doing the project?

    		•
  • Q : Is PER an excellent guide to investments

    Is PER an excellent guide to investments?

    		•
  • Q : Explain breakthroughs on

    Explain breakthroughs on low-discrepancy sequences.

    		•