Good answers will acknowledge that defensive tactics insulate existing

Good answers will acknowledge that defensive tactics

This preview shows page 57 - 58 out of 58 pages.

Good answers will acknowledge that defensive tactics "insulate" existing management from the vagaries of the marketplace and may allow ineffective management to remain in charge. Obviously, defensive maneuvers do not always act in the best interest of shareholders and many students will argue that management benefits most from these activities. The ethics debate about these issues is always an interesting one.Topic: POISON PILLSType: ESSAYS29-57
Chapter 29 - Mergers and Acquisitions83. Discuss why Bank of America purchased Merrill Lynch in 2009. In the opener to the chapter, the authors discuss this deal as of the first quarter in 2009. The main reasons cited for the transaction were size—the new company would be the largest U.S. bank with $2.7 trillion in assets and also be the largest underwriter of high-yield debt, the third largest underwriter of equity, and the ninth largest adviser on global mergers and acquisitions. Furthermore, BOA believed they could benefit from $7 billion per year in cost savings. In hindsight, BOA underestimated Merrill Lynch's financial problems when Merrill Lynch reported a loss of $15 billion in the last quarter of 2009. It is anticipated that students will be able to answer this question, not so much with exact numbers, but with updated information on the unfolding financial drama of BOA.Topic: BANK OF AMERICAType: ESSAYS29-58

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