Problem Solution: Lester Electronics

Problem Solution: Lester Electronics Lester Electronics ( lei) is a consumer and electronics parts master distributor that markets its products to original eqhttp://www.oppapers.com/media/images/btn_join.gifuipment manufacturers. Recently, the CEO of Shang-wa is wishing to retire and has no perfunctory progression plans for the compeverys management. Simultaneously, Shang-wa is being pursued for a coup detat by Transnational Electronics Corporation (TEC). Lester Electronics and Shang-wa Electronics are both unbalanced over the take over possibility. Lester is set to lose 43% of their revenues if they lose Shang-wa as a supplier. Both Lester and Shang-wa agree that a unification between the deuce companies would be the best stem to maintain their relations and hold off takeover attempts by the two other companies Lester believes that a merger between the two companies would be the best way to increase their shareholders wealth. (University of Phoenix, 2007). feature Analysis Issue and Opportunity Identification The first issue, Lesters monetary managers should evaluate their immediate payment flows to see if they brook the money to either buy Shang-wa victimization the equity that they already have or to finance the corrupt with debt. During this evaluation, Lester should evaluate the timing of the notes flows.

If Lester decides to purchase Shang-wa using any debt, the financial managers will have to ensure that the timing of the cash flow is such that Lester is equal to make the principal and refer payments on the debt (Ross, 2005). If this evaluation is completed success luxurianty, 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. Managers should choose the capital structure that they believe will have the highest firm value, because this capital structure will be the approximately beneficial to the firms stockholders (Ross, 2005). If Lester... If you want to get a full essay, order it on our website: Ordercustompaper.com

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