The decision of the board was ? not surprisingly ? to merge with Shang-wa Electronics. Situation Analysis Issue and Opportunity Identification LEI is facing a bi-polar issue ? either acquire Shang-wa Electronics or be acquired by Avral Electronics, S.A. Having decided to acquire Shang-wa, the next question is how to finance the acquisition...
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Having decided to acquire Shang-wa, the next question is how to finance the acquisition. Since the balance sheets for the two firms show that LEI will be unable to finance this merger through existing equity, the option then becomes long-term financing. Opportunities for long-term financing are: ? Debentures ? Secured and unsecured notes ? Convertible notes ? Fixed deposit loans ? Mortgages ? Eurobonds ? Interest rates swaps ? Forward rate agreements (FRA's) ? Interest only futures ? Option on future contracts...
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Lester From the financial statements of Shang-Wa and Lester it is evident that Lester's average debt ratio is 0.30 when compared to Shang-Wa's 0.76. So by borrowing 75% of the required capital for buying of Shang-Wa, the new merged company will have a debt ratio of 0...	2 / 434
Problem Solution: Lester Electronics If this evaluation is completed successfully, then Lester should be able to increase in financial standing within the industry. Second, LEI is facing will be to determine a financial structure and a financing plan to complete the merger with Shang-wa...	11 / 3011
Gap Analysis: Lester Electronics For the United States, Lester has been tied in an exclusive distribution contract with Shang-Wa Electronics. This agreement has been serving both companies very well...	2 / 555
Wealth Maximization Concepts Worksheet To do this, Lester can use the dividend-growth model to show the shareholders the potential return of both companies. Lester must consider the potential future opportunities each venture will provide when considering these returns...	2 / 495