Discy Latest Questions

  1. Yes Rayon, hostile takeovers are absolutely legal. A hostile takeover is the acquisition of one company by another without approval from the target company's management. They are not really bad unless they are putting a harm to shareholders. They are called hostile because the board of directors, orRead more

    Yes Rayon, hostile takeovers are absolutely legal. A hostile takeover is the acquisition of one company by another without approval from the target company’s management. They are not really bad unless they are putting a harm to shareholders. They are called hostile because the board of directors, or those in control of the company like managers, generally oppose being bought out and typically reject a more formal offer, compelling the other company to follow harsh tactics.

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  1. Firstly, takeover refers to the acquisition of one company by another company. While hostile means unfriendly or opposed. By the explanation of these two terms separately we can conclude that a hostile takeover is when an acquiring company attempts to takeover a target company against the wishes ofRead more

    Firstly, takeover refers to the acquisition of one company by another company. While hostile means unfriendly or opposed. By the explanation of these two terms separately we can conclude that a hostile takeover is when an acquiring company attempts to takeover a target company against the wishes of the target company’s management. It is achieved by an acquiring company achieve by going directly to the target company’s shareholders or they can also fight to replace its management.
    Watch the video below to get a better insight.

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  1. There is no specified time as such, but reverse takeover definitely takes lesser time then other available options. It could be noted that reverse mergers can take only a few weeks to complete while in some cases, it is as little as 30 days. By comparison, the IPO process can take longer time whichRead more

    There is no specified time as such, but reverse takeover definitely takes lesser time then other available options. It could be noted that reverse mergers can take only a few weeks to complete while in some cases, it is as little as 30 days. By comparison, the IPO process can take longer time which could range from six to 12 months. A conventional IPO is a more complicated process and tends to be considerably more expensive, as many private companies hire an investment bank to underwrite and market shares of the future public company.

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  1. It can prove to be beneficial for shareholders to go for a reverse merger, specially if these original shareholders belong to a failed company. As the norms follows, these shareholders will have a chance to vote on whether to accept the merger or not. In most of the cases its better to accept the meRead more

    It can prove to be beneficial for shareholders to go for a reverse merger, specially if these original shareholders belong to a failed company. As the norms follows, these shareholders will have a chance to vote on whether to accept the merger or not. In most of the cases its better to accept the merger as their stock is not owning up to a worth, voting for the reverse merger might seem to present hope of eventually recovering their investment. In this case, they will receive a certain number of shares in the new company in exchange for the original shares, but that number will be considerably smaller than the number of shares in their original holding.

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  1. A reverse takeover is a great way to get a private company go public. The reason it is so, is basically because reverse mergers allow the owners of private companies to retain greater ownership and control over the new company. This is definitely a huge benefit to owners looking to raise capital witRead more

    A reverse takeover is a great way to get a private company go public. The reason it is so, is basically because reverse mergers allow the owners of private companies to retain greater ownership and control over the new company. This is definitely a huge benefit to owners looking to raise capital without diluting their ownership. This way a company can also prevent itself from the extensive process of IPOs (Initial Public Offers).

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  1. According to a definition on Wikipedia, "A reverse takeover or reverse merger takeover is the acquisition of a public company by a private company so that the private company can bypass the lengthy and complex process of going public. The transaction typically requires reorganization of capitalizatiRead more

    According to a definition on Wikipedia, “A reverse takeover or reverse merger takeover is the acquisition of a public company by a private company so that the private company can bypass the lengthy and complex process of going public. The transaction typically requires reorganization of capitalization of the acquiring company.” Broadly speaking, it is a type of merger that private companies involve in so as to become publicly traded without going for an initial public offering . Firstly, the private company buys enough shares to control a publicly traded company. The private company’s shareholder then exchanges its shares in the private company for shares in the public company.

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  1. Negative externalities can cause indusries to overproduce if these firms are not generating socially efficient output. Let's say if an industry is spoiling the air quality or water quality for its production and not internalizing the cost of it then the marginal cost of production will be lower thenRead more

    Negative externalities can cause indusries to overproduce if these firms are not generating socially efficient output. Let’s say if an industry is spoiling the air quality or water quality for its production and not internalizing the cost of it then the marginal cost of production will be lower then the marginal social cost which would lead the firm to produce extra units of its good. If this cost is included to determine the output by the common economic equation of MR= MC then MC would be higher and with increase in cost the profit would reduce if produced more than efficient output, which will restrain it from overproducing.

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  1. Externality is a term of economics and it is defined by, "a consequence of an industrial or commercial activity which affects other parties without this being reflected in market prices, such as the pollination of surrounding crops by bees kept for honey." Broadly speaking, externality can be descriRead more

    Externality is a term of economics and it is defined by, “a consequence of an industrial or commercial activity which affects other parties without this being reflected in market prices, such as the pollination of surrounding crops by bees kept for honey.” Broadly speaking, externality can be described as an impact of one’s actions on others or we can say that it is the cost or benefit that affects a third party who did not choose to incur that cost or benefit. An externality can be both positive or negative and can stem from either the production or consumption of a good or service.

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  1. A common example of externality can be seen from an industry who is producing its product and impacting the nature negatively with the pollution emitted by the production. This pollution will not only impact the area of the firm but also the area around it and society living nearby is effected. SimiRead more

    A common example of externality can be seen from an industry who is producing its product and impacting the nature negatively with the pollution emitted by the production. This pollution will not only impact the area of the firm but also the area around it and society living nearby is effected. Similarly if a firm constructs a garden then it would be a positive externality as it would not just benefit the firm but also the surrounding area and environment subsequently.

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  1. There are two major types of externalities viz positive externality and negative externality. Positive externalities is the positive effect an activity imposes on an unrelated third party, it can arise either on the production side, or on the consumption side. While negative externality is the negatRead more

    There are two major types of externalities viz positive externality and negative externality. Positive externalities is the positive effect an activity imposes on an unrelated third party, it can arise either on the production side, or on the consumption side. While negative externality is the negative effect it can also arise either on the production side, or on the consumption side as in positive externality.
    The other types of externalities are:
    1. Inter Firm (Production) Externalities: If production of goods by one firm has a positive or negative impact on another firm.
    2. Beneficial Externalities: The activity of one firm may also have beneficial effect on others. For example, if a power plant is set up near a coal mine, hopefully, more coal can be extracted due to an abundant supply of power.
    3. Externalities in Utility (Consumption Externalities): Externalities also can occur if the activities of an economic agent directly affect an individual’s utility.
    4.Public Goods Externalities: Public goods create externality problems because such goods can be allocated through the market and those who enjoy such goods do not pay prices directly.

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