Which of the following are examples of business alliances?
A. Mergers
B. Acquisitions
C. Joint ventures
D. Equity partnerships
E. C and D
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Selecting the appropriate financing structure for the combined firms requires consideration of which of the following:
A. The impact on the combined firm's EPS
B. Potential violation of loan covenants
C. The extent to which the primary needs of both the buyer's and seller's shareholders are satisfied.
D. A and B only
E. A, B, and C
Realizing synergy often requires spending money. Which of the following are examples of such expenditures?
A. Employee recruitment and training expenses
B. Severance expenses
C. Investment in equipment to improve employee productivity
D. Redesigning workflow
E. All of the above
Which one of the following is not one of the steps in the M&A model building process?
A. Valuing the acquirer and the target firms as standalone businesses
B. Valuing the target and acquiring firms including synergy
C. Determining the initial offer price for the target firm
D. Establishing search criteria for the potential target firm
E. Determining the combined firm's ability to finance the transaction.
What happens to the outstanding shares of the target firm when the acquirer purchases 100% of the target's outstanding stock?
A. They are added to the number of shares of Acquirer stock outstanding
B. They are cancelled.
C. They are converted into preferred stock.
D. They are shown as treasury stock on the books of the combined companies.
E. They are swapped for debt in the new company.
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