per year beginning one year H e a l t h M e d i c a l

Discussion:

Identify a recent merger or
acquisition that has occurred in the healthcare industry (within the last 5
years). What were the main reasons for the merger or acquisition? What are your
thoughts on the merger or acquisition?

Make sure you use scholarly
references. Popular websites are not scholarly resources. Sites such as
Investopedia and Wikipedia are not acceptable as these are not considered
scholarly or reliable. All content that is not your original thoughts
should have citations and references, including initial and response posts.

Complete:

For your this assignment, write a narrative essay (minimum 1500 words) in which you address and discuss the questions and statements listed below. Use at least four scholarly sources and remember to demonstrate a thorough understanding of the READ and ATTEND sections in your essay. Cite your sources in APA format.

Discuss reasons consolidations, mergers, and acquisitions occur in the healthcare industry.

Dublin Medical (DM), a large established corporation with no growth in its real earnings, is considering acquiring 100% of the shares of Arlington Corporation, a young firm with a high growth rate of earnings. The acquisitions analysis group at DM has produced the following table of relevant data:

DM’s analysts estimate that investors currently expect growth of about 6% per year in Arlington’s earnings and dividends. They assume that with the improvements in management that DM could bring to Arlington, its growth rate would be 10% per year beginning one year from now with no additional investment outlays beyond those already expected. What is the expected gain from the acquisition? What is the net present value (NPV) of the acquisition to DM shareholders if it costs an average $30 per share to acquire all of the outstanding shares?

Would it matter to DM’s shareholders whether the shares of Arlington stock are acquired by paying cash or DM stock?

Be sure to use at least four sources and use APA format.