FINANCIAL MANAGEMENT Essay Example | Topics and Well Written Essays - 1500 words

FINANCIAL MANAGEMENT - Essay ExampleThe broad membership of the panel includes people from investor community, justness practitioners in the city and people from crinkle houses. The panel became a statuary body in May-06, thereby giving it the power to enforce its rules and lows in compliance of the code. The code of the panel is also included in the part 28 of the Companies Act 2006. It is the overall responsibility of the panel towards policy making, financing and administrating functions or the decorate and its code. The two committees of Panel include the Hearing Committee and the Code Committee. It also has a Panel decision maker that carries out the daily work of the Panel and is creditworthy of general administration. The Panel operates with 6 general principles, 38 rules and 4 fundamental objectives which include equal and fair treatment for shareholders, availability of information to the shareholders in suitable and timely manner, restoring fair securities industrys a nd preventing frustration action against any of them. B. Identify and examine economic reasons for acquisitions and mergers and discuss wherefore the expected economic benefits may not be achieved? The primary reason for acquisitions and mergers by a profligate is its desire and effort to increase its commercialize power. For increase the size and market capitalization of the firm, companys go for horizontal, vertical and conglomerate mergers. Other economic reasons for acquisitions and mergers include overcoming of market barriers, increased speed to the market by increasing market capitalization and gaining access to new markets, overcoming the high risk and high be of new product development, diversification into other activities/businesses, and reshaping the firms competitive scope. Some companies go for mergers and acquisitions to structure their cost of capital by increasing/diluting fairness and through leverage buyouts. More often busy border acquisitions offer the com pany with cheap access to resources like labour and raw materials, modern technology and sometimes benefits from legality. Sometimes the expected benefits out of a merger and acquisition may not be achieved by the firms. Many firms tend to increase their cost of capital post merger rather than lessen it. Moreover, in case of leverage buyouts many companies fall in liquidity and solvency risks by increasing their debt equity ratio more than anticipated. For a successful merger and acquisition a firm needs to regard the culture of the musical arrangement it is aiming to acquire. The firm many not receive a good support from the employees and stakeholders of the organization acquired which reduces the economic benefits expected out of the acquisition. Another primary concern in the acquisitions is the valuation of company to be acquired. In case of high valuations where a company pays high price in excess of market value for acquiring other company, economic benefits tend to dry do wn over a intent of time. Part 2 Identify the long term funding options available for unquoted small and medium business enterprises, and discuss the advantages and disadvantages of these funding options. Small and medium businesses (SMEs) include the companies that are not listed in stock supersede and wherein business is owned by a limited number of people. Moreover, there includes family partnerships in which individuals start-off with the plan of achieving self employment. SMEs face problems in getting financing primarily due to