Merging Between Verizon and MCI and Google's Investment and Business Strategies

Accounting, Finance, SPSS
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Assignment 1
Chapter 3: CASE 1; Verizon and MCI
1. Acquiring MCI is a good option for Verizon Communications. MCI firm has a large customer base which implies higher earning potential. Additionally, the firm has an efficient fiber-optic infrastructure that accelerates new product development while saving the cost of production. In the MCI/Verizon merger, Verizon appears to have won, while MCI was on the losing end. Qwest and Verizon Communications both pursued MCI; Verizon won even though its offer was substantially lower than Qwest. MCI's board of directors noted that merging with Verizon was in the best interest of MCI stakeholders.
2. Verizon employed a friendly takeover rather than a hostile takeover of MCI due to the potential challenge of integrating these two complex businesses. Verizon also employed a popular strategy in which the merger agreement would include a special dividend payable to MCI's shareholders upon their approval. These approaches were the right ones since they strengthened the relationship between the two companies, facilitating a smooth merger.
3. In my opinion, the MCI directors acted in the best interest of both their shareholders and stakeholders. The decision to merge with Verizon Communications would increase MCI's value above its closing price. Additionally, the merger would be a tax-free reorganization, in which MCI shareholders would defer taxes until they sold their stock. Verizon Communications also acted in the best interest of its shareholders since the merger would increase the company's earning capacity and cost savings. On the other hand, MCI stakeholders (customers) indicated that they preferred a transaction between MCI and Verizon rather than a transaction between MCI and Qwest.
4. Verizon's management's argument that paying cash balances as special dividends to MCI shareholders appears to be misleading. The dividend payment would reduce MCI's cash above what is required to meet its normal operating cash requirements. My recommendation is that Verizon would have offered the special dividend as a bonus, separate from the acquisition offer.
5. Today, Verizon Communications is the second-largest telecommunication company in the USA, with a market cap of $237.0 billion and earns revenue worth $ 130 billion. Meanwhile, the telecom industry is progressing at a high rate, with companies applying innovative technologies such as artificial intelligence to secure their networks (Kocovic et al., 2017). The telecom industry is also launching internet device connectivity as everyday products are integrated and linked to the internet. The most recent mergers include the Vodafone and TPG merger, the T-Mobile and Sprint merger, and the Equinix acquisition of Packet.
Chapter 5: CASE 2; Google and Hardware
1. Innovation is Google's primary and most significant core competency. The Company uses unique think processes to invent and innovate products that fill market niches. Regarding market needs, Google mainly provides a way for its customers to obtain relevant information that is useful for daily living. This is seen in inventions such as the search engine, maps, and navigation, google translate, the knowledge graph, intuitive reminders, and answers, as well as customized information. If I were Google's CEO, the vision for the future would be to significantly improve research, drive new product development, and improve infrastructure to provide the highest quality outcomes for customers.
2. Apart from incremental cash flows from the acquisition of Nest, Google LLC is likely to reduce its cost of operations due to higher economies of scale. Moreover, investment in assets is spread over a larger output, resulting in technical economies. Acquisitions also enable Google to gain a larger market share, increasing its competitive advantage over other tech companies. By operating as an autonomous subsidiary company, Google is likely to experience duplication replication of products and services, which increases competition for the same product, forcing the company to reduce its prices.
3. Google's investment strategy is mainly capital appreciation to achieve rapid growth. The company constantly invests in technology start-up companies, which enables it to take an early stake in some of the innovations built out of its operations. The company looks at emerging trends and technologies and ingratiates itself with the next generation business leaders. This investment strategy is appealing to Google's shareholders since it enables the company to increase its earning capacity.
4. Google's business strategy is mainly differentiation, which enables the company to maintain its competitive advantage over other tech companies. The company continuously develops new, unique products and continues to improve existing products using the differentiation strategy. This strategy is driven by the industry's strong and aggressive competition. Google achieves its objective of intensive growth by diversifying its products hence increasing its investment portfolio, market share, and earning potential.
5. One of Google's most significant strengths is its brand value and its worldwide recognition as a reliable search engine. Besides, Google is unbeatable in terms of competition and enjoys high revenues along with rapid growth. Google's weaknesses include its overdependence on advertisement revenues, unfair business practices that prevent the entry of new players into the industry, and its failure in the social media revolution. Google's opportunities include the strengthening of Android OS, increased demand for remote work, increased use of Google class and Google Play, and the ability to expand its services to emerging markets. Google's threats include anti-trust controversies, the recent decline in market shares, emerging competitors such as Amazon and Facebook, as well as economic uncertainties due to the Coronavirus pandemic that has reduced its operations and earning capacity. To enhance its position in the market, Google may take part in developing functional social media platforms to reduce its overdependence on advertising revenue.
Assignment 2
Chapter 1: Federal Government Bonds
Federal government bonds are securities issued by a government to support its debt obligations and expenditure. Such bonds are issued via auctions at domestic stock exchanges and are dominated by the country's currency. Federal government bonds pay periodic payments known as coupon payments. The bonds are backed by the government and are often considered low risk due to the federal government's ability to collect tax revenue and print money to back the securities (Andritzky, 2012). Therefore, they have a high credit rating due to the federal government's high capacity to repay these bonds. Due to their low risk, federal government bonds normally pay low-interest rates. In terms of the indenture, federal government bonds mature in 10 to 20 years. Fixed-rate government bonds have an interest rate risk that occurs due to rising interest rates, which results in investors holding low-paying bonds as compared to that of the market. Fixed-rate government bonds normally range from 0.5% to 2% per year and are considered low yield due to these low-interest rates. Federal government bonds are usually convertible, which means that they are fixed-income debt that can be converted during the bond's life at the discretion of the bondholder. Being converti...