Mergers as a Device for Reducing Mergers as a Device for Maximizing Competition Managements Welfare Other Motives
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Merger Premium
A Merger Premium is Paid if the Acquiring Banks Shareholders Receive More Than the Current Market Price for Their Stock
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Exchange Ratio
The Number of Shares of Stock Offered By an Acquiring Bank for Each Share of Stock of the Acquired Bank
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Dilution of Ownership
Dilution of Ownership Occurs When the Acquiring Bank Offers an Excessive Number of Shares to the Acquired Bank Shareholders. The EPS Will Fall Below its Original Level for the Acquiring Bank When This Happens.
McGraw-Hill/Irwin Bank Management and Financial Services, 7/e
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Regulatory Agency Must Give Top Priority to Competitive Effects Mergers with Anti-Competitive Effects May Be Approved if it Can Be Shown That There Are Significant Public Benefits Such As Providing Convenient Services or Rescuing a Failing Bank
McGraw-Hill/Irwin Bank Management and Financial Services, 7/e
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Herfindahl-Hirschman Index
Measure of Market Concentration It is the Sum of the Squared Market Share for All Banks in a Specific Market Area Department of Justice Guidelines
Postmerger HHI of Less Than 1800 Change in HHI of Less Than 200
McGraw-Hill/Irwin Bank Management and Financial Services, 7/e
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2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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