Problem:
Was the AOL -- Time Warner merger a) one of the great mergers between media companies in recent history? b) a disastrous merger for Time Warner shareholders? or c) none of the above? Explain your reasoning.
Why might a public company consider a leveraged buyout (LBO)? What is the role of mezzanine financing in an LBO?
Following announcement of an acquisition, what are some techniques for enlisting support of factions which were opposed to the acquisition? This might include shareholder groups at the acquiring company or company being acquired, community groups, target company management factions, institutional investors, etc. If possible, cite examples of difficult take-overs you may be familiar with.
Debt is the lowest cost of long term financing by a wide margin when compared to cost of equity capital. Try to estimate Lester Electronics cost of debt and cost of equity. Generally speaking, why would a company who can raise sufficient debt capital to finance growth not be 100% debt, zero % equity in its capital structure in order to minimize its cost of capital?