Google potential acquisition of groupon


Problem:

Net Present Value (NPV) method is one of the most important methods which is used to make capital budgeting decisions by almost every company. NPV method is important because it helps financial managers to maximize shareholders' wealth by making better capital budgeting decisions.

Google is Considering Acquiring Groupon:

Use various internet search engines such as news.google.com for the latest news on this acquisition.

1) Do you think Google's potential Acquisition of Groupon would add value to the shareholders of both corporations? Why or why not?

2) Based on your analysis and findings, what would you recommend to the shareholders of Google and Groupon? Please explain your reasoning.

Answer these questions in your respond to following issues:

1. The impact on Google shareholders.

2. The impact on Groupon shareholders.

3. The financial conditions of both corporations.

4. Why might one combined Google/Groupon company be more profitable than if they remained separate companies? In general, what makes an acquisition successful?

5. Potential pitfalls - might the combined entity actually be less profitable than either company operating independently? What are the risk factors with this potential acquisition?

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Finance Basics: Google potential acquisition of groupon
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