Exam 32: Corporate Restructuring

The following are advantages of spin-offs: I.They widen investor choice by allowing them to invest in just one part of the business. II.They can improve incentives for managers. III.By spinning off businesses with "poor fit," parent firms can concentrate on their core businesses. IV.They relieve investors of the worry that funds will be siphoned off from one business to support unprofitable capital investments in another.

The main characteristic(s)of LBOs is (are)

Indirect costs of bankruptcy are borne principally by

The main characteristic(s)of leveraged restructurings is (are)

What is a spin-off?

Which of the following is not a motive for privatization?

In the case of the RJR Nabisco LBO, the gain in market value for RJR stockholders was several times more than the

If a firm's management leads a leveraged buyout transaction, then the transaction is called a(n)

The Chrysler bankruptcy and reorganization into New Chrysler resulted in which of the following events?

A conglomerate discount refers to which circumstance?

A privatization is a sale of a government-owned company to private investors.

Briefly describe the main features of the Bankruptcy Reform Act of 1978.

The following are private equity funds:

Leveraged restructurings are designed to force mature, successful, but overweight firms to

Spin-offs are not taxed as long as shareholders of the parent company are given at least 80 percent of the shares in the new company.

The largest and best documented LBO of the 1980s was

In a spin-off:

Private-equity investment funds are organized as

Private-equity ownership relies less on internal capital markets than conglomerates do.

Briefly explain why private equity has an advantage, versus publicly owned firms, in creating value.