Company valuation is an art not a science Essay

Company valuation is an art not a science - Essay Example There are several rationales for mergers. Companies undertake M/A because of (a) synergy created by operating and financial economies, differential efficiency, or increased market power; (b) tax considerations; (c) purchase of assets below their replacement cost; and (d) diversification, not to mention possible managers’ personal incentives. For any of the four economic reasons mentioned, the M/A is successfully undertaken only if the resultant post-M/A firm attains a value greater than sum of the two separate firms (Brigham and House, 2004, p.796-798). A M/A is necessarily a sale or exchange, which means that the determination of company values is a requisite. There are various methods of valuation that may be undertaking for the purpose of M/A. These include assessing the target or merging companies’ book value, economic value, replacement value, and break-up value. The book value is the accounting value, that is, the net amount of the company’s total assets less total liabilities; the per-share value is arrived at by dividing this net amount by the number of common shares. As conveyed by its definition, the book value of a company is a straightforward valuation method based on historical transaction costs. The dividend-discount model, the most popular equity valuation method to determine the worth of the firm to the shareholders, is equal to the present value of all future cash dividends. This would prove useful to a company contemplating a financial merger that did not involve unifying operations. The target company is expected to conduct its business in the same way it has before the merger or acquisition, and the acquiring company expects to benefit in the nature of a majority stockholder (Helfert, 2003, pp. 390). The replacement or reproduction value is the amount that would be required to replace an existing fixed asset in kind. Replacement value is one

Identify points of Comedy and Tragedy on the "Big Two-Hearted Essay

Identify points of Comedy and Tragedy on the "Big Two-Hearted River" by Ernest Hemingway - Essay Example omedy takes place when Nick goes to wade into the water and when he steps in, the current causes him to lose his balance and he slips on the rocks letting one of the grasshoppers to get away. â€Å"He was sucked under in the whirl by Nicks right leg and came to the surface a little way down stream. He floated rapidly, kicking. In a quick circle, breaking the smooth surface of the water, he disappeared. A trout had taken him† (50). This ends in the tragic death of the grasshopper but the initial drop and struggling of the grasshopper is somewhat comic based on the way Nick had let it go by slipping. The struggle that Nick continually goes through is also somewhat comic. Something continues to go wrong when he is trying to bag a larger trout. â€Å"The trout hung heavy in the net, mottled trout back and silver sides in the meshes. Nick unhooked him; heavy sides, good to hold, big undershot jaw and slipped him, heaving and big sliding, into the long sack that hung from his shoul ders in the water† (74). Tragedy is also something that occurs often in the story as illustrated by Nick when he guts and prepares to eat the trout by performing communion through eating the fish and drinking water from the river imitating what Jesus did in a church service when he used red wine to represent his blood and bread to represent his body. He performed what Jesus did as exemplified by the following. â€Å"Nick cleaned them, slitting them from the vent to the tip of the jaw. All the insides and the gills and tongue came out in one piece they were both males; long gray-white strips of milt, smooth and clean. All the insides clean and compact, coming out altogether. Nick took the offal ashore for the minks to find† (93). â€Å"He laid his rod down moved along to the shady end of the log and took the sandwiches out of his pocket. He dipped the sandwiches in the cold water. The current carried away the crumbs. He ate the sandwiches and dipped his hat full of water to drink,