Lester Electronics will borrow 40million cash to purchase Shang-wa electronics for a cash price of $100 million. This will be accomplished through a cash flow loan for one year at a rate of 6% interest and preferred stock. First, Lester will increase net income by 40% through launching a new marketing campaign that highlights a new products and services obtained from the merger. This strategic plan will add $60 million to retained earnings, with the already $61 million in retained earnings, will give a cash balance of $121 million after one year. Lester will then issue $60 million in preferred stock in efforts to acquire Shang-wa for $100 million. This plan is an enhancement because the borrowed funds are at an interest rate of only 6% and preferred stock of 60 million both through low risk debt and preferred stock. The interest that the company must pay on debt is 6% %, compared with the average long-term debt loans of 7.75%. In addition, Lester Electronics only needs to......

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Title: Personal Perspective Paper
Approximate Word Count: 512
Approximate Pages: 3 (250 words per double-spaced page)

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