Capital allocation is the most fundamental responsibility of senior management. A company flush with cash has several options when it comes to deploying capital. It can return some of it to stakeholders through stock buybacks, raising dividends or reducing debt. It can also invest in the business through increased capex, or investments into research & development and working capital or it can engage in M&A. Mergers & acquisitions are the largest use of capital. yet it is widely accepted that over two-thirds of mergers fail despite their goal […]
