FIN/444 Mergers, Acquisition and Corporate Restructuring
1. The pooling of interest and the purchase method are the two methods allowed by the FASB in accounting for Mergers and Acquisitions.
2. FASB prefers the purchase method of accounting for business combinations because
3. Strategic planning is the responsibility of the CEO and executive management team?
4. Which of the statements below is an essential element of the strategic planning process
5. Strategic planning processes can utilize formal procedures or develop through informal communications throughout the organization.
6. According to the study done by Jensen (1986) he found that
7. According to studies done by Hirshleifer and Png (1989) and French and McCormick (1984) suggested that
8. Between 1895 and 1904 what type of merger was most prevalent?
9. Andrade, Mitchell, and Stafford (2001) concluded that much of the merger activity that transpired during the ‘90s was caused by
10. Which characteristics will not make a firm vulnerable to a takeover :
B. A highly liquid balance sheet with large amounts of excess cash, a valuable securities portfolio,and significant unused debt capacity.
11. Which of the following are defenses against hostile takeover bids:
12. The leading methods used in the valuation of a firm for merger analysis are:
13. The Black-Scholes option pricing model should be used with which of the valuation techniques?
14. When calculating the WACC we should use which of the following?
15. Three major types of merger motivations were identified by Berkovitch and Narayanan (1993):
16. All are reasons for given for merger activity except
17. Tender offers can be either hostile or friendly
18. All are types of mergers except
19. Which federal securities law regulates the sale of securities
20. This act applies to public issues of debt securities with a value of $5 million or more.
21. Its stated purpose was to protect target shareholders from swift and secret takeovers
22. A strategic alliance represents a combination of subsets of assets contributed by two (or more) business entities for a specific business purpose and a limited duration.
23. All of the following are rationales for joint ventures except
24. Strategic alliances are informal or formal decisions or agreements between two or more firms to cooperate in some form of relationship.
25. Defined contribution plans can be of three kinds: stock bonus plans, profit-sharing plans, and money purchase plans.
26. Under ERISA, ESOPs are stock bonus plans or combined stock bonus plans and money purchase plans designed to invest primarily in qualifying employer securities.
27. According to The U.S. General Accounting Office (GAO) (1986) all of the following are types of ESOPs except: leveraged,
28. ESOP’s can be used as an antitakeover weapons
29. The master limited partnership (MLP) is a type of limited partnership whose shares are publicly traded.
30. The most widely used method for determining the cost of equity is
31. The risk free rate used in the CAPM is:
32. Which of the following is a type of share repurchase?
33. Which of the following is a form of restructuring and divestitures?
34. A split-up is defined as the separation of a company into two or more parts.
35. In all of the listed research papers, corporate divestitures, on average, create wealth for parent shareholders.
36. In dual-class recapitalizations (DCRs), firms have created a second class of common stock that has limited voting rights and usually a preferential claim to the firm’s cash flows.
37. The main reason/reasons for the large levels of foreign M&A activity is:
38. U.S. company acquisitions of non-U.S. companies are in the range of ______% to ______% of total world M&A activity.
39. Growth is the most important motive for international mergers.
40. The fraud and self-dealing revelations of new millennium resulted in investigations by congress, the SEC, and the State Attorney General in several jurisdictions, particularly New York and led to the Sarbanes-Oxley Act (SOA).
41. A widely held view is that about 67% of acquisitions do not earn the buyers’ cost of capital.
42. Mergers fail for which of the following reason/reasons?
43. The modern literature on long-range planning indicates that long-range strategic planning involves at least the following elements:
A. Environmental reassessment for new technologies, new industries, and new forms of competitors.
B. A consideration of capabilities, missions, and environmental interactions from the standpoint of the firm and its divisions.
C. An emphasis on process rather than particular goals or objectives.
D. An emphasis on iteration and on an iterative feedback process as a methodology for dealing with ill-structured problems.
E. All of the above