Decision making in mergers: an application of the analytic hierarchy process

Article Abstract:

The Analytic Hierarchy Process (AHP) is a method by which firms can evaluate potential acquisition candidates. The model provides a framework for screening against multiple criteria and complex problems. AHP procedures consider the viewpoints of the firm's various stakeholders, allowing for group consensus. Despite imposing a hierarchal structure to the problem, the model lets decision makers choose the factors to be considered and rank them according to relative importance.

Multiple criteria decision making, Models, Acquisitions and mergers

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Portfolio management using a factor-analytic stock selection strategy

Article Abstract:

A study was done to evaluate six price-related CAPM (capital asset pricing model) anomaly variables. Firm size, earnings/price ratio, price, Tobin's q ratio, price/book ratio and price/sales ratio were studied by applying maximum likelihood factor analysis. Results show that portfolios conditioned by firm size alone displayed abnormal behavior. Findings also indicate that firms ranked according to firm size exhibited greater performance compared to other variable rankings.

Research, Economic aspects, Portfolio management, Investment analysis, Securities analysis, Capital assets pricing model, Capital asset pricing model

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A note on the equitable treatment of mergers

Article Abstract:

The merger of companies which limit competition while increasing the merged company's market power is prohibited by Clayon Act section 7 and Sherman Act section 1. The Dept of Justice has also issued regulations called Merger Guidelines as a forecasting aid for candidates for possible mergers to evaluate the merger's compliance. A market index of concentration is included in the guidelines to interpret data.

Conglomerate corporations, Laws, regulations and rules, United States. Department of Justice, Market share

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