How Might the Use of Stock, as an Acquisition "Currency

question 61

Essay

How might the use of stock, as an acquisition "currency," have contributed to the sustained decline in JDS Uniphase's stock through mid-2001? In your judgment what is the likely impact of the glut of JDS Uniphase shares in the market on the future appreciation of the firm's share price? Explain your answer.

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Definitions:

Underwriting Standards

Criteria used by lenders and insurers to assess the risk of applicants and determine eligibility for products.

Mandatory Arbitration

A requirement, often found in contracts, that disputes must be resolved through arbitration rather than through litigation in court.

Lemon Law Coverage

Protections afforded to consumers under laws that provide remedies for purchasers of cars and other consumer goods that fail to meet standards of quality and performance.

Used Cars

Vehicles that have been previously owned and used, typically sold through various outlets including private sales, dealerships, and auctions.