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Equity Acquisitions: CNBC Explains

Sunday, 29 May 2011 | 12:00 AM ET

When one business acquires another, there are several ways of financing the deal, including the use of the acquiring company's shares to cover the cost of the transaction. How do these transactions work from the acquiring company's perspective and what are the benefits for shareholders? Salman Khan of the Khan Academy discusses in a hypothetical example.