Issues with acquisition

Q. When a company is bought by another company, does its stock price always go up? — P.Y., Carson City, Nevada

A.

Not necessarily. Imagine that the acquiree has a stock price of $50 and a market value of $5 billion. If it’s announced that it’s being purchased for, say, $6 billion (equivalent to $60 per share), the stock price will generally rise to around $60 on the news. It’s common for a company to be bought for more than its market value, perhaps because the purchaser sees value in factors such as its proprietary technology, patents or growth potential. It might also be bought at a premium due to a bidding war.

Other times, a company may be struggling, and it may end up being bought at close to its current market price.

The acquirer’s stock price might jump, too, if investors see the purchase as strategically smart. If investors think the company is overpaying, its stock might sink a bit. It all depends on investor expectations and reactions to the deal. Some acquisitions turn out to be brilliant moves, while others end up regretted.

Q. How can I track my portfolio online? — C.A., Hickory, North Carolina

A.

Your brokerage will probably offer portfolio tracking. Otherwise, many sites, such as Finance.Yahoo.com, do so. You might click something like a “create portfolio” link, then enter the various stocks and funds you own and the prices at which you bought them. After that, you can click in any time to see the latest value of each holding, as well as your overall portfolio’s value. To help you keep up with stocks on your watch list, you might create a separate portfolio for those as well.

15-year or 30-year, fixed or adjustable?

When you’re buying a home, choose the kind of mortgage that will serve you best. The traditional 30-year fixed-rate loan isn’t perfect for everyone. A 15-year loan, for example, might be right for you, as might an adjustable-rate mortgage. Here’s a look at the pros and cons of different kinds of mortgages.

A 30-year mortgage suits many homebuyers because it generally offers lower monthly payments — and it can be easier to qualify for, too. Lower payments can help buyers buy a better house, and/or they can leave more money in the household budget for saving, investing, emergencies and other needs.

But such a long loan means that you’ll be paying a lot more interest over the life of the loan than you would with a shorter-term one. You’re likely to have a higher interest rate, too, and you’ll build equity in your home more slowly.

A 15-year mortgage will likely offer a somewhat lower interest rate, but your monthly payments will be higher. You’ll build equity in your home faster, you’ll pay much less in overall interest, and you’ll pay off your loan in half the time. Still, if you’re tempted to go with a 15-year loan, consider taking on a 30-year one and making extra payments regularly. Doing so will shorten the life of your loan considerably, and if money ever gets tight, you can always make only your regular payments.

Next, consider whether you should get a fixed-rate or adjustable-rate mortgage. When interest rates are low, fixed-rate loans — which make it easy to budget — are compelling. When rates are on the high side, consider an ARM. It will give you a relatively low starter rate for a few years, after which your payments will ratchet up or down per prevailing interest rates. An

ARM can burn you if rates keep rising for a long time, but it can be a smart choice if you don’t plan to stay in the home for decades.

Weigh your options carefully before getting a mortgage.

Learn more at ConsumerFinance. gov.