P3 Exam

[Acid]

Hi there

In the p3 exam , that option questions i think it was 3 in which the mining company purchases the boat and other company .. so what was he strategic rationale you wrote?? I wrote that they wanted to maximimse the shareholders wealth...

What did you write?:confused:

[xrisbwalya]

If i remember, the scenario mentioned the rationale for purchasing the Boat company,that was to provide synergy to the tour? company... yes i also mentioned maximising the shareholders value in the case for the first company purchased.. maximising of s/holder's value was emphasised upon in the first two chapters.. i think.
Generally the paper was fair, how did you find it? this was my second attempt.. at first i had 49% imagine..............
Well Good luck guys... we shall pass :laugh:

[Acid]

Hi

I wrote that they wanted to maximize the shareholders wealth as the scenario made a statement to that effect i.e. declining returns to shareholders , So although I wrote about conglomerate , the rationale i mentioned was increasing return to shareholders wealth..what do you think about it ? True or not?

As for synergy I think the second company which was purchased was meant to provide synergy to the boat company isnt?

[abu fatma]

Salaam
Any decision to acquire another company surely will be to increase shareholders value
I think this is not the strategic reason, I think the management want seeks diversification behind such acquistion (unrelated)

[herbster]

The reason was to diversify operations, spread the risk.

There was a cash cow, a dog and a star and i think part c of the question (the technology company) was a question mark.

The boat company supplying tthe theme park was an example of related diversification.