Subject category:
Finance, Accounting and Control
Published by:
Harvard Business Publishing
Version: 10 March 2003
Length: 13 pages
Abstract
What the acquiring company pays for a target in a merger or acquisition is called "consideration." Consideration can be in the form of cash, shares, or a combination of cash and shares. During the 1990s, equity- linked consideration became the dominant method of payment in the United States. This series describes the basic mechanics of equity-linked consideration. Part 1 looks at the effects of all-stock consideration on the values realized by the shareholders of the target and acquiring companies.; To describe the effects of stock consideration on the shareholders of the target and acquiring companies.
About
Abstract
What the acquiring company pays for a target in a merger or acquisition is called "consideration." Consideration can be in the form of cash, shares, or a combination of cash and shares. During the 1990s, equity- linked consideration became the dominant method of payment in the United States. This series describes the basic mechanics of equity-linked consideration. Part 1 looks at the effects of all-stock consideration on the values realized by the shareholders of the target and acquiring companies.; To describe the effects of stock consideration on the shareholders of the target and acquiring companies.