Mergers and Acquisitions Exam Questions and Answers 100% Pass
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Module
Merger and Acquisitions
Institution
Merger And Acquisitions
Mergers and Acquisitions Exam Questions and Answers 100% Pass
T/F M & A creates shareholder value over time - Answers False - it does NOT create shareholder value over time, which is a big criticism
mergers - Answers legal event that unites two companies, resulting in one surviving company; the s...
Mergers and Acquisitions Exam Questions and Answers 100% Pass
T/F M & A creates shareholder value over time - Answers False - it does NOT create shareholder value
over time, which is a big criticism
mergers - Answers legal event that unites two companies, resulting in one surviving company; the
shareholders of the target company will receive the shares of the buyer company, cash, or a
combination of stock and cash
T/F Assets transfer automatically in mergers - Answers true
T/F Liabilities do not follow a merger - Answers False - liabilities, unknown and known, follow
T/F Mergers require individual votes consenting the merger. - Answers False - only majority vote
needed; dissenters have appraisal rights, however.
acquisition - Answers buying stock, equity of another to have control over that company i.e. Facebook
and WhatsApp
T/F You cannot buy all the equity/stock/asset - Answers false - you can
divestiture - Answers sale, liquidation, or spin-off of a corporate division by a company of an asset that is
not performing well, that is not core to the company's business, or that is worth more as a separate
entity.
spin-off - Answers The distribution of shares in a subsidiary to existing parent company stockholders.
asset acquisition - Answers higher transaction costs than equity acquisition because it takes more time
and money to go through, number, and define those assets... must go through due diligence on massive
list of assets (buying equipments, trademarks, patents, etc).
Advantage of asset acquisition? - Answers You can pick and choose what you want; more
control/certainty over liabilities because you read into different contracts, previous lawsuits, etc. You
can have securities made against, focused on assets themselves, don't have to worry about debt; less
liable for taxes
public vs. private - Answers public - involves publicly traded companies... more complicated than
private; public stock exchange
private - involves privately traded companies
equity/stock acquisition - Answers assets and liabilities will transfer with the stock of the company—
with the buyer unable to pick and choose the assets and liabilities it wants—and the buyer will also
receive any unknown and undisclosed liabilities of the target.
Advantage of equity acquisition? - Answers more direct forward; target company is simply moving to a
new owner, all of the assets remain with the target company.
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