Rapid integration is usually important for all of the following reasons except for
A. Minimizes employee turnover
B. Improves the morale and productivity of current employees of both the acquiring and acquired firms
C. Builds confidence in current employees in the competence of management
Dispenses with the need for pre-integration planning
E. Reduces customer turnover
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Which of the following are commonly used sources of financing for M&A transactions?
Asset based lending
B. Cash flow based lending
C. Seller financing
D. A and B only
E. All of the above
All of the following are true of buyer due diligence except for
A. Due diligence is the process of validating assumptions underlying valuation.
B. Can be replaced by appropriate representations and warranties in the agreement of purchase and sale.
C. Primary objectives are to identify and to confirm sources and destroyers of value
D. Consists of operational, financial, and legal reviews.
Endeavors to identify the “fatal flaw” that could destroy the deal
The negotiation process consists of all of the following concurrent activities except for
A. Refining valuation
B. Deal structuring
C. Integration planning
Due Diligence
E. Developing the financing plan
In a merger, the acquiring firm assumes all liabilities of the target firm. Assumed liabilities include all but which of the following?
A. Current liabilities
B. Long-term debt
C. Warranty claims
D. Fully depreciated operating equipment
E. Off-balance sheet liabilities