Is your firm still using outdated capital budgeting techniques? They tend to be overly conservative in evaluating alternatives—and may reject a project that should have been accepted. Instead, the authors suggest a simulation method that will help you make better decisions. © 2003 Wiley Periodicals, Inc.

Maintain Control of the Sales ProcessSelling a business is serious business and it is intolerant of ambiguity and less-than-complete commitment. You need to be willing to jump in with both feet and be prepared for complete immersion into the process. The first step is to take control of the process. That means controlling the auction, the data rooms, and the document drafting. Sellers have a control advantage as long as they don't squander it. To gain control, the seller must do enough advance preparation to be in command of the information. Too often, sellers are put in a defensive position against buyers who are running a finetooth comb over the business and demanding information and answers. Sellers won't be in an underdog position if they do their own due diligence. A thorough understanding of their company will help them gain some leverage at the bargaining table. If they proactively manage the due diligence process and can provide buyers with quality information, they can take control over the diligence process. Deal makers often focus on who is in control of the process. When you are in control, you are setting the pace of the transaction and determining the priority of the negotiations and discussions. Control the AuctionTo control the auction process, the seller should ensure that bidders are managed and treated consistently. In addition, the seller will want to control the timing and nature of the information flows and will want to be sure that a coordinated message is communicated to all of the bidders. The ideal situation for any auction is to keep at least two bidders interested in the target up to and including the negotiation of terms and conditions. In a well-controlled auction, a seller can use the element of competition to mitigate the impact of bad news. For instance, if a seller knows that there are shifts in the business that are negative, such as coststructure increases or customer changes, then the seller may want to mitigate the potential damage. If the seller can control the release of the potentially adverse information, it can force the bidders to incorporate this data into their valuations and deliberations when the element of competition forces them to view the situation as positively as possible. If the seller waits and delivers the "bad news" to the final bidder in the final stages of the negotiation process, this information could be heavily negotiated and may kill the deal. Control the Data RoomsOften, a seller will decide, in a competitive sales process, that the most efficient means of making information available to prospective buyers is to set up a data room containing all relevant information. A data room is particularly useful when there is more than one interested buyer because it ensures that all parties have access to the same information.Sellers need to know what information is in the data rooms and ensure that it is accurate and consistent with the selling documentation and that it can be followed and traced from document to document. If a seller has inconsistent data, ...

US companies are stockpiling cash, despite the economic downturn. But why are they doing this? And are they holding too much cash? The authors of this article investigate the reasons for this trend, the effect on a company's value, and how a firm can tell if it is indeed holding too much cash. © 2011 Wiley Periodicals, Inc.

“Toeholds” are a merger‐and‐acquisition (M&A) strategy, where a company buys a limited number of shares in a target firm prior to initiating M&A discussions with the target firm. Toeholds can lower the risk and cost of an acquisition. But this strategy carries risks of its own. The authors examine potential positive and negative consequences of using toeholds. © 2010 Wiley Periodicals, Inc.

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