Exam 31: Mergers

Explore all topics

Firm A has a value of $150 million, and B has a value of $100 million. Merging the two would allow a cost savings with a present value of $40 million. Firm A purchases B for $120 million. What is the gain from this merger?

Free

(Multiple Choice)

4.9/5

(34)

Question 1

Correct Answer:

Verified

Briefly discuss takeover defenses.

Free

(Essay)

4.8/5

(44)

Question 2

Correct Answer:

Verified

The main purpose of takeover defenses is to raise the price an acquiring firm must pay to take over a firm. Examples of defensive tactics include the staggered board, supermajority amendment, restricted voting rights, poison pill, litigation, asset restructuring, and liability restructuring among others.

The following reasons are good motives for mergers except: I. Economies of scale II. Complementary resources III. Diversification IV. Eliminating Inefficiencies

Free

(Multiple Choice)

4.9/5

(41)

Question 3

Correct Answer:

Verified

Firm A is planning to acquire Firm B. If Firm A prefers to make cash offer for the merger it indicates that:

(Multiple Choice)

4.9/5

(39)

Question 4

Firm A has a value of $100 million, and B has a value of $70 million. Merging the two would allow a cost savings with a present value of $20 million. Firm A purchases B for $75 million. What is the cost of this merger?

(Multiple Choice)

4.8/5

(34)

Question 5

If firms A is acquiring firm B and Bs shareholders are given the fraction "x" of the combined firm, then the cost of this merger is:

(Multiple Choice)

4.9/5

(35)

Question 6

Explain the central tenet of the Clayton Act of 1914.

(Essay)

4.9/5

(30)

Question 7

Takeover defenses are designed to benefit

(Multiple Choice)

4.7/5

(35)

Question 8

Tele Atlas acquisition of Tom Tom is an example of: I. Horizontal merger II. Vertical merger III. Conglomerate merger

(Multiple Choice)

5.0/5

(41)

Question 9

A vertical merger is one in which the buyer expands forward in the direction of the ultimate consumer or backward toward the source of raw material.

(True/False)

4.8/5

(34)

Question 10

Compensation paid to top management in the event of a takeover is called a:

(Multiple Choice)

4.8/5

(38)

Question 11

The following mergers have been blocked on antitrust grounds except:

(Multiple Choice)

4.8/5

(30)

Question 12

Many mergers that appear to make economic sense fail because managers are unable to handle the complex task of integrating two firms with different: I. production processes II) accounting methods III. corporate cultures

(Multiple Choice)

4.9/5

(42)

Question 13

The easiest task for the managers is the integration of the two firms.

(True/False)

4.9/5

(36)

Question 14

The following are good reasons for mergers: I. Surplus funds II. Eliminating inefficiencies III. Complementary resources IV. Increasing earnings per share (EPS)

(Multiple Choice)

4.9/5

(39)

Question 15

The would-be acquirer making a tender offer directly to shareholders is another form of proxy fight.

(True/False)

4.9/5

(46)

Question 16

If Firm A acquires Firm B for cash, then the cost of the merger is equal to the cash payment minus B's value as a separate entity.

(True/False)

4.7/5

(33)

Question 17

Google's acquisition of Double Click is an example of: I. Horizontal merger II. Vertical merger III. Conglomerate merger IV. Cross-border merger

(Multiple Choice)

4.9/5

(40)

Question 18

Live Nation acquisition of Ticketmaster is an example of: I. Cross-border merger II. Horizontal merger III. Conglomerate merger IV. Vertical merger

(Multiple Choice)

4.9/5

(42)

Question 19

When a merger of two firms is achieved by one firm automatically assuming all the assets and all the liabilities of the other firm; such a merger requires:

(Multiple Choice)

4.9/5

(27)

Question 20

Showing 1 - 20 of 73

Exam 31: Mergers

Firm A has a value of $150 million, and B has a value of $100 million. Merging the two would allow a cost savings with a present value of $40 million. Firm A purchases B for $120 million. What is the gain from this merger?

Briefly discuss takeover defenses.

The following reasons are good motives for mergers except: I. Economies of scale II. Complementary resources III. Diversification IV. Eliminating Inefficiencies

Firm A is planning to acquire Firm B. If Firm A prefers to make cash offer for the merger it indicates that:

Firm A has a value of $100 million, and B has a value of $70 million. Merging the two would allow a cost savings with a present value of $20 million. Firm A purchases B for $75 million. What is the cost of this merger?

If firms A is acquiring firm B and Bs shareholders are given the fraction "x" of the combined firm, then the cost of this merger is:

Explain the central tenet of the Clayton Act of 1914.

Takeover defenses are designed to benefit

Tele Atlas acquisition of Tom Tom is an example of: I. Horizontal merger II. Vertical merger III. Conglomerate merger

A vertical merger is one in which the buyer expands forward in the direction of the ultimate consumer or backward toward the source of raw material.

Compensation paid to top management in the event of a takeover is called a:

The following mergers have been blocked on antitrust grounds except:

Many mergers that appear to make economic sense fail because managers are unable to handle the complex task of integrating two firms with different: I. production processes II) accounting methods III. corporate cultures

The easiest task for the managers is the integration of the two firms.

The following are good reasons for mergers: I. Surplus funds II. Eliminating inefficiencies III. Complementary resources IV. Increasing earnings per share (EPS)

The would-be acquirer making a tender offer directly to shareholders is another form of proxy fight.

If Firm A acquires Firm B for cash, then the cost of the merger is equal to the cash payment minus B's value as a separate entity.

Google's acquisition of Double Click is an example of: I. Horizontal merger II. Vertical merger III. Conglomerate merger IV. Cross-border merger

Live Nation acquisition of Ticketmaster is an example of: I. Cross-border merger II. Horizontal merger III. Conglomerate merger IV. Vertical merger

When a merger of two firms is achieved by one firm automatically assuming all the assets and all the liabilities of the other firm; such a merger requires:

Goals and Governance of the Firm

How to Calculate Present Values

Valuing Bonds

The Value of Common Stocks

Net Present Value and Other Investment Criteria

Making Investment Decisions With the Net Present Value Rule

Introduction to Risk and Return

Portfolio Theory and the Capital Asset Pricing Model

Risk and the Cost of Capital

Project Analysis

Investment, Strategy, and Economic Rents

Agency Problems, Compensation, and Performance Measurement

Efficient Markets and Behavioral Finance

An Overview of Corporate Financing

How Corporations Issue Securities

Payout Policy

Does Debt Policy Matter

How Much Should a Corporation Borrow

Financing and Valuation

Understanding Options

Valuing Options

Real Options

Credit Risk and the Value of Corporate Debt

The Many Different Kinds of Debt

Leasing

Managing Risk

Managing International Risks

Financial Analysis

Financial Planning

Working Capital Management

Corporate Restructuring

Governance and Corporate Control Around the World

Filters