Exam 23: Corporate Restructuring

Millicom is acquiring Vikonic's outstanding common stock for $15 million. Financial information (in $ millions) on these two firms prior to the acquisition is as follows: -What are the total assets and stockholders' equity (in $ millions) if the purchase method is used as the accounting method for this merger?

In analyzing a merger the ____ is the number of the acquiring company shares received per share of acquired company stock owned.

Whipple Industries is considering the acquisition of the Blanchard Company in a stock-for stock exchange. Selected financial data for the two companies is shown below. No synergy is expected in this merger. Determine the post-merger earnings per share if the Blanchard company shareholders accept an offer of $22 per share in a stock-for-stock exchange.

The ____ is the number of acquiring company shares received per share of acquiring company stock owned.

The reasons why a company may choose external growth by merger over internal growth include

Bankruptcy occurs when the firm

A combination of two or more companies that compete directly with each other is known as a

A reorganization plan is reviewed by the ____ for fairness and feasibility.

An alternative to a spin-off is a(n)_______________which allows a large company to capture the value of a high-growth business buried within the organization.

The annual after-tax free cash flow from the acquisition by Pacific Care of Universal Health is projected to be $12 million. These flows are expected to continue for 20 years. No value is placed on cash flows beyond 20 years. If the appropriate risk-adjusted discount rate for the merged firm is 15 percent, what is the maximum amount Pacific Care should pay to acquire Universal Health?

Legal insolvency occurs when

What is a form of business combination in which a company purchases all or a controlling block of another company's common shares and the two companies become affiliated?

Chapter 11 bankruptcy proceedings may be initiated by ____ or more of its unsecured creditors who have aggregate claims of at least ____.

Explain a form of business combination called a holding company and how the combination is achieved.

After a merger with Velo Blind, Sunlite's earnings per share are $1.50. If Sunlite had a P/E ratio of 14 times before the merger and a price of $28 a share after the merger, what is Sunlite's post-merger P/E?

A combination in which all of the combining companies are dissolved and a new firm is formed is known as a ____.

An anti-takeover measure that is inserted in the corporate charter stating that 80% of the stock shares must approve the takeover proposal is a(n):

A form of business combination in which two (unaffiliated) companies contribute financial and/or physical assets, as well as personnel, to a new company to engage in some economic activity is known as a ____.

Osicom Tech is acquiring Rexon's outstanding common stock for $32 million. Before acquisition financial information on these two firms is given as follows (in $ millions): What are the total assets and stockholders' equity (in $ millions) if the purchase method is used as the accounting method for this merger?

One reason for a company to spin-off a division is to: