BUS523 Quantitative Analysis for Decision Making
Unit 2 Discussion
Acquisition
Your firm is considering acquiring a smaller company. The products and markets fit well within your organization’s strategy. This potential acquisition is a high-tech company that is presently losing money. Some in your organization will argue that the acquisition is not a good idea since the high-tech company is losing money, and this will cause your firm’s return on equity to decrease.
Are the naysayers correct? Will your ROE decrease? Why?
How important are changes in ROE when considering an acquisition?
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