Poor strategic fit - The two companies have strategies and objectives that are too different and they conflict
with one another.
Cultural and Social Differences - It has been said that most problems can be traced to "people problems." If
the two companies have wide differences in cultures, then synergy values can be very elusive.
Incomplete and Inadequate Due Diligence - Due diligence is the "watchdog" within the M & A Process. If
you fail to let the watchdog do his job, you are in for some serious problems within the M & A Process.
Poorly Managed Integration - The integration of two companies requires a very high level of quality
management. In the words of one CEO, "give me some people who know the drill." Integration is often poorly
managed with little planning and design. As a result, implementation fails.
Paying too Much - In today's merger frenzy world, it is not unusual for the acquiring company to pay a
premium for the Target Company. Premiums are paid based on expectations of synergies. However, if synergies
are not realized, then the premium paid to acquire the target is never recouped.
Overly Optimistic - If the acquiring company is too optimistic in its projections about the Target Company,
then bad decisions will be made within the M & A Process. An overly optimistic forecast or conclusion about a
critical issue can lead to a failed merger.
Kavungya answered the question on April 14, 2021 at 12:25
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XYZ ltd. is considering three possible capital projects for next year. Each project has a 1 year life, and
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b. Compute the correlation coefficient between
i. A and B
ii. A and C
iii. B and C
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Required.
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b. Compute the covariance of asset
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iii. B and D
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REQUIRED:
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For financial analysis, the company uses the straight line method of depreciation and an average tax rate of
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REQUIRED:
i. Compute the project's net present value (N.P.V).
ii. Compute the payback period and the accounting rate of return.
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Once of the problems facing the company is that there is a considerable degree of uncertainty regarding
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(b) Comment on other matters which the management should take into account before reaching
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