A(n) ________________ occurs when the management of the target company purchases a controlling interest in that company and the company incurs a significant amount of debt as a result. a. greenmail b. statutory merger c. poison pill d. leveraged buyout
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A(n) ________________ occurs when the management of the target company purchases a controlling interest in that company and the company incurs a significant amount of debt as a result.
a. |
greenmail |
b. |
statutory merger |
c. |
poison pill |
d. |
leveraged buyout |
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- In a _____, the managers of the firm purchase the outstanding shares and take the firm private. Select one: a. asset acquisition b. vertical acquisition c. proxy contest d. tender offer e. management buyoutWhen one company buys the assets and liabilities of another company, this is known as which of the following?Choose one answer.a. Limited liability company b. Merger c. Conventional corporation d. AcquisitionIdentify the option that you would consider to be among the disadvantages of forming a limited company.a) Legal control and stringent requirements that have to be compliedb) The need to entrust control and decisions to a fewc) Restrictions on return of capital if in excess of company’s requirementsd) The ease with which the share of ownership could be disposed of Select one: A. b, c & d B. c & d C. a, b & c D. a, c & d
- 1.) When share options issued to employees are exercised, the entity shall: a. recognize a loss for the unamortized balance b. make a transfer among equity components c. recognize a gain for the unamortized balance d. do nothing 2.) A share-based payment transaction with cash alternative whereby the right of choice of settlement is retained by the entity is accounted for as: a. either cash-settled or equity-settled, but not both b. equity-settled c. partly cash-settled and equity-settled d. cash-settled 3.) A share-based payment transaction with cash alternative whereby the right of choice of settlement is given to the employee is accounted for as: a. cash-settled b. either cash-settled or equity-settled, but not both c. partly cash-settled and equity-settled d. equity-settledWhich is the best anti-hostile takeover strategy that can be made by an entity when there is a high chance that current holders of convertible bonds may use their right and increase their holdings in the firm?a. Staggered board of directorsb. Lobster trapc. Greenmaild. Nancy Reagan defenseWhich of the following statements is most CORRECT? Oa. The primary rationale for most operating mergers is synergy. Ob. In most mergers, the benefits of synergy and the premium the acquirer pays over the market price are summed and then divided equally between the shareholders of the acquiring and target firms. Oc. Financial theory says that the choice of how to pay for a merger is really irrelevant because, although it may affect the firm's capital structure, it will not affect its overall required rate of return. Od. The basic rationale for any financial merger is synergy and, thus, the estimation of pro forma cash flows is the single most important part of the analysis. Oe. The acquiring firm's required rate of return in most horizontal mergers will not be affected, because the 2 firms will have similar betas.
- Leveraged buying is : a. buying a company by using its borrowing potential b. launching a hostile takeover bidc. is a cross-shareholdingd. none of the aboveThe following are sentences relating to types of mergers and acquisitions. Which is/are true? [S1] Both horizontal and product-extension types of M&A involve catering to the same market group before and after the M&A. [S2] A vertical M&A involves a supplier or buyer of the acting firm as the target firm.a. Only S1 is true.b. Only S2 is true.c. Neither is true.d. Both are true.Which of the following statement about a rights issue is correct? a. The share price can be expected to increase on the ex-rights date b. On the ex-rights date the rights separate from the share c. The subscription price is usually greater than the market price d. A rights issue is offered to an investor whether they are an existing shareholder or not e. If you buy shares cum-rights you are not entitled to participate in the rights issue
- Acquirer Corporation would like to purchase the equity of Target Corporation. Target Corporation has the following financial information and forecasts: *How much is the value of control over Target Corporation from the point of view of Acquirer Corporation?A rights offering that gives existing target shareholders the right to buy shares in either the target or the acquirer at a deeply discounted price once certain conditions are met is called a: A. Golden parachute B. Poison pill C. White knight D. Classified boardA bargain purchase arises when the price paid to acquire a controlling interest in another company is less than the acquirer’s share of the fair value of net assets of the company being acquired. At the end of your preliminary analysis, you believe that a business combination results in a bargain purchase. What is your next step? A. Recognize an immediate gain in the consolidated statement of profit and loss without further analysis. B. Recognize a liability in the consolidated balance sheet. C. Contact the acquiree to confirm its intention. D. Reassess each step of your analysis to confirm your preliminary findings.