Question 1

Under a typical Lehman formula dealmakers may earn 5% of the first $1 million of the takeover price.

Accepted Answer

A) True 
 B)False  True

Question 2

Following Smith v. Van Gorkom:

Accepted Answer

A)  Targets must immediately announce all overtures from potential bidders 
B)  Directors are more likely to seek outside fairness opinions 
C)  We have seen more use of debt financing 
D)  None of the above 
A)  Targets must immediately announce all overtures from potential bidders 
B)  Directors are more likely to seek outside fairness opinions 
C)  We have seen more use of debt financing 
D)  None of the above B

Question 3

Chartejee and Yan's research has showed:

Accepted Answer

A)  Mergers don't pay 
B)  Contingent value rights are used when the parties have asymmetric information 
C)  Conglomerate mergers are more likely to yield negative returns 
A)  Mergers don't pay 
B)  Contingent value rights are used when the parties have asymmetric information 
C)  Conglomerate mergers are more likely to yield negative returns B

Question 4

SPACs have not been popular since the 1990s.

Accepted Answer

A) True 
 B)False

Question 5

A reverse merger takes longer to complete than a typical merger.

Accepted Answer

A) True 
 B)False

Question 6

When a company sells off all its assets, it falls under the regulation of the Investment Company Act of 1940.

Accepted Answer

A) True 
 B)False

Question 7

Targets can use an asset sell-off to avoid legitimate liabilities.

Accepted Answer

A) True 
 B)False

Question 8

Answer: Bidders use merger arbitrage as a way of lowering their takeover costs.

Accepted Answer

A) True 
 B)False

Question 9

Answer: In a short-form merger:

Accepted Answer

A)  Bidders only submit a two-page filing with the SE 
B)  Deals usually close within two weeks 
C)  The standard stockholder approval process can be bypassed 
D)  A 51% approval by shareholders is required 
A)  Bidders only submit a two-page filing with the SE 
B)  Deals usually close within two weeks 
C)  The standard stockholder approval process can be bypassed 
D)  A 51% approval by shareholders is required

Question 10

Contingent value rights may provide some guarantee if the acquirer's shares fall below some level.

Accepted Answer

A) True 
 B)False

Question 11

In risk arbitrage the following is true:

Accepted Answer

A)  Investors may expect the bidder's stock price to fall 
B)  Investors may expect the target's stock price to rise 
C)  Both a and b 
D)  Neither a or b 
A)  Investors may expect the bidder's stock price to fall 
B)  Investors may expect the target's stock price to rise 
C)  Both a and b 
D)  Neither a or b

Question 12

A letter of intent:

Accepted Answer

A)  Is legally required in all U.S. deals 
B)  Sets forth more detailed terms than a term sheet 
C)  Is more common in closely held acquisitions 
D)  None of the above 
A)  Is legally required in all U.S. deals 
B)  Sets forth more detailed terms than a term sheet 
C)  Is more common in closely held acquisitions 
D)  None of the above

Question 13

In a freeze-out:

Accepted Answer

A)  Minority shareholders cannot hold up a merger 
B)  Certain members of management are prevented from entering company facilities 
C)  Targets are prevented from receiving a takeover premium 
D)  None of the above 
A)  Minority shareholders cannot hold up a merger 
B)  Certain members of management are prevented from entering company facilities 
C)  Targets are prevented from receiving a takeover premium 
D)  None of the above

Question 14

Pursuant to Basic v. Levinson:

Accepted Answer

A)  Targets must immediately announce all overtures from potential bidders 
B)  Bidders must announce all overtures to targets 
C)  Targets may not release false information on deal progress 
D)  None of the above 
A)  Targets must immediately announce all overtures from potential bidders 
B)  Bidders must announce all overtures to targets 
C)  Targets may not release false information on deal progress 
D)  None of the above

Question 15

With an SPAC bidding shareholders are quite familiar with the target to be acquired when they purchase the SPAC's shares in its IPO.

Accepted Answer

A) True 
 B)False

Question 16

In a de facto merger:

Accepted Answer

A)  Bidders may be able to avoid all the target's liabilities 
B)  Bidders own at least 30% of the target's stock 
C)  Only California law applies 
D)  The bidder is considered to have acquired the target even if no formal acquisition took place True or False Questions 
A)  Bidders may be able to avoid all the target's liabilities 
B)  Bidders own at least 30% of the target's stock 
C)  Only California law applies 
D)  The bidder is considered to have acquired the target even if no formal acquisition took place True or False Questions

Question 17

One of the advantages of an asset acquisition is that it may not be necessary to solicit approval from its own shareholders.

Accepted Answer

A) True 
 B)False

Question 18

The merger between Exxon and Mobil is an example of:

Accepted Answer

A)  Vertical merger 
B)  Horizontal merger 
C)  Conglomerate merger 
D)  Reverse merger 
A)  Vertical merger 
B)  Horizontal merger 
C)  Conglomerate merger 
D)  Reverse merger

Question 19

Private equity firms are frequent LBO dealmakers.

Accepted Answer

A) True 
 B)False

Under a typical Lehman formula dealmakers may earn 5% of the first $1 million of the takeover price.

Following Smith v. Van Gorkom:

Chartejee and Yan's research has showed:

SPACs have not been popular since the 1990s.

A reverse merger takes longer to complete than a typical merger.

When a company sells off all its assets, it falls under the regulation of the Investment Company Act of 1940.

Targets can use an asset sell-off to avoid legitimate liabilities.

Answer: Bidders use merger arbitrage as a way of lowering their takeover costs.

Answer: In a short-form merger:

Contingent value rights may provide some guarantee if the acquirer's shares fall below some level.

In risk arbitrage the following is true:

A letter of intent:

In a freeze-out:

Pursuant to Basic v. Levinson:

With an SPAC bidding shareholders are quite familiar with the target to be acquired when they purchase the SPAC's shares in its IPO.

In a de facto merger:

One of the advantages of an asset acquisition is that it may not be necessary to solicit approval from its own shareholders.

The merger between Exxon and Mobil is an example of:

Private equity firms are frequent LBO dealmakers.

History of Mergers

Legal Framework

Merger Strategy

Antitakeover Measures

Takeover Tactics

Hedge Funds As Activist Investors

Going-Private Transactions and Leveraged Buyouts

The Private Equity Market

The Junk Bond and the Leveraged Loan Market and Stapled Financing

Corporate Restructuring

Restructuring in Bankruptcy

Corporate Governance

Joint Ventures and Strategic Alliances

Valuation

Tax Issues in Mergers Acquisitions

Filters

Exam 1: Introduction

Under a typical Lehman formula dealmakers may earn 5% of the first $1 million of the takeover price.

Following Smith v. Van Gorkom:

Chartejee and Yan's research has showed:

SPACs have not been popular since the 1990s.

A reverse merger takes longer to complete than a typical merger.

When a company sells off all its assets, it falls under the regulation of the Investment Company Act of 1940.

Targets can use an asset sell-off to avoid legitimate liabilities.

Answer: Bidders use merger arbitrage as a way of lowering their takeover costs.

Answer: In a short-form merger:

Contingent value rights may provide some guarantee if the acquirer's shares fall below some level.

In risk arbitrage the following is true:

A letter of intent:

In a freeze-out:

Pursuant to Basic v. Levinson:

With an SPAC bidding shareholders are quite familiar with the target to be acquired when they purchase the SPAC's shares in its IPO.

In a de facto merger:

One of the advantages of an asset acquisition is that it may not be necessary to solicit approval from its own shareholders.

The merger between Exxon and Mobil is an example of:

Private equity firms are frequent LBO dealmakers.

History of Mergers

Legal Framework

Merger Strategy

Antitakeover Measures

Takeover Tactics

Hedge Funds As Activist Investors

Going-Private Transactions and Leveraged Buyouts

The Private Equity Market

The Junk Bond and the Leveraged Loan Market and Stapled Financing

Corporate Restructuring

Restructuring in Bankruptcy

Corporate Governance

Joint Ventures and Strategic Alliances

Valuation

Tax Issues in Mergers Acquisitions

Filters