RE: Wells Fargo How are the acquisition/growth financed? Wells Fargo uses its capital in order to finance its growth and acquisitions. It acquired Wachovia Bank by issuing “20 billion in new shares” (David.2011). However, one cannot rule out other ways that this acquisitions would produce. The Internal Revenue Service has tax codes that change all of the time. During the time that this acquisitions was being discussed by the two companies, the government was having the famous “bailout” of banks was going through congress (Attkisson. 2009). Will you increase debt further, or dilute ownership of WFC stock to raise the capital needed? This would depend on how the market was doing at the time. If the market is stable, then increasing debt further would be a good idea. The WFC stock could be diluted to raise capital also depending on the market. Both of these are ways to raise capital. It would just depend on the effects that it would cause on which one to use.
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This note was uploaded on 03/09/2012 for the course BUSI 400 taught by Professor E during the Spring '11 term at Lee.