Assignment:
When discussing these companies, you must focus on microeconomic topics that will be covered in this course such as supply and demand, profitability, sales growth, cost structure (e.g., job cuts/outsourcing resulting from acquisition/sale of company), product elasticities, industry structure, international trade, tax impacts and externalities resulting in government actions. Consider how the microeconomic principles from Chapter 1 influenced the merger decisions.
In order to obtain full credit, your team must evaluate quantitative data related to your companies that support your views and your team must include the data with your paper.
These data must include:
1. Net income and revenue for last three years must be included for the acquiring company and the acquired company. (You should provide an analysis of profitability and sales growth between your merger companies and/or between your merger companies and rival companies).
2. Where available you must evaluate the stock prices immediately before and after the merger is announced.
3. The paper must describe whether the companies are in a perfectly competitive, monopolistically competitive, oligopolistic or monopoly industry with supporting documentation for your evaluation.
4. You should explain the impact that the merger is expected to have on these companies. For example, will jobs be cut or outsourced when the merger concludes? Will the merger re-energize the company perhaps through more globalization for the acquired companies? Are there any tax savings?
5. You must describe whether the products sold by the firm are price elastic or not, whether the products are necessities or luxury goods and whether there are any major cross elasticities between the firm's products and other products.
6. You should describe the role that globalization and government regulation plays in affecting the firm's behavior.
7. You must select which of the two mergers which your team was assigned to review is the best from an investment perspective and support your selection with a detailed analysis
The clarity of your team's writing and in class presentation will determine a significant portion of your grade. During your presentation, keep the material concise and to the point. Feedback on your presentation should help you submit a better written paper. For your written paper, please be sure that sentences are coherent and that each paragraph follows from the previous paragraph. Team papers require careful editing to avoid duplication of ideas or presentation of inconsistent ideas in the same paper. You may want to elect someone to play the editing role for the team. Do not overuse quotations. I want to read your team's writing. Overuse of quotations will give your paper a cut-and-paste feel. Do not use a quote to convey portions of the author's argument that you find hard to explain. Instead, figure out how to explain the argument in your own words. Where quotes are used, they must be documented with a footnote.
A good way to avoid a poorly written paper is to take a look at a manual of style. I recommend The Elements of Style by William Strunk and E.B. White or The Elements of Business Writing by Gray Blake and Robert W. Bly. You may bring your paper for review to the Saunders Writing Center in Plant Hall prior to submission for grammatical assistance and you may also provide a draft to me for my recommendations.