'Stock Market and Disk Drive Operations\r'

'Question: †Why is Seagate task this exercise? Is it necessary to take the Veritas sh bes in a sort out transaction? Who argon the winners and losers resulting from the transaction? resultant: †Seagate is undertaking this transaction to generate important wealth gains for Seagate shargonholders. thither is a measure out gap generates due to Seagate’s VERITAS stake. VERITAS stake value exceeds the entire market capitalisation of the Seagate. Seagate faces two problems because of VERITAS stake. First, the company’s core plow apparent motion operations were not receiving full value in the market.\r\nSecond, the company would incur a significant revenue liability if the company attempt to legalise its VERITAS stake be selling the shares. Yes, it is necessary to divest the VERITAS shares in a separate transaction. It helps the company to celebrate itself from tax liabilities and distributing the VERITAS stock tax free to its shareholders. The Seagate sh areholders are definitely winner if the two-step transaction lead happen. The shareholders of Seagate fetch higher value of disk drive operations and tax free shares of VERITAS. The Seagate Management is in addition winner.\r\nThey exit rid of tax liabilities related to VERITAS stocks and get full value of disk drive operations. The VERITAS also feel like winner as they get higher number of stocks in exchange of lesser number of stocks. Question: †Does the interdict value of Seagate’s operating assets imply markets are inefficient? Solution: †The interdict value of Seagate’s operating assets implies that markets are inefficient. The core disk drive operations do not receive its full value in the market. Seagate’s Management thinks that disk drive operations value is larger than what the value is in market.\r\nThis shows that markets are inefficient. Question: †Why might a negative value exist? Solution: †Tax liabilities: †The nega tive value of the Seagate’s operating assets is due to tax liabilities which the company is facing because of VERITAS stocks. Other liabilities : †Fear that managers give destroy value: †The negative value of the Seagate’s operating assets is not due to fear that managers exit destroy value. Moreover, the investors have trust in the managers of the Seagate that’s why they want to retain the top vigilance of the Seagate in the newly build company.\r\n'