Running head: PROBLEM SOLUTION: LESTER ELECTRONICS Problem Solution: Lester Electronics Lester Electronics Inc., founded in 1978, specializes in the distribution of capacitors for both the consumer and industrial markets. Over thirty five years ago, Lester Electronics Inc. (LEI) entered into an exclusive distribution contract with Shang-wa, a Korean-based capacitors manufacturer. Throughout the years, both companies prospered and were able to capitalize on growth opportunities and rising demands. However, in recent weeks, both companies have been approached by other organizations seeking to acquire, either through a sale or hostile takeover, their assets. In the event that Shang-wa was to be sold to another company, this would then have a substantial long-term negative impact on LEI’s sales. On the other hand, certain suggestions have proposed the possibility of having LEI acquire Shang-wa in order to secure and grow both businesses. As both organizations face these new threats and opportunities, LEI’s board of directors have finally decided to move forward in acquiring Shang-wa Electronics; a decision that seems to be the optimal path to its financial stability and growth while “looking to maximize shareholder wealth and increase the organization’s value” (Ross et al, 2005). Throughout this analysis, we will discuss the several long-term financial alternatives that are available to LEI in terms of financing its acquisition of Shang-wa. Situation Analysis Issue_ and Opportunity Identification_ Suppose that both companies failed to merge and were consequently bought off my other firms; this might result in lost sales over the next 5 years for LEI and cast an uncertain future for Shang-wa. That is why both companies have been given the opportunity to grow by LEI’s acquisition of Shang-wa. Also, another very important issue lies in ensuring that LEI’s management look over the proposal to buy Shang-wa to first determine whether a takeover would be beneficial or...