Mergers and Acquisitions Paper 3

1

Which of the following is true if no synergies occur after the merger of two firms?






2

The coinsurance effect can be reduced by
Retirement of Debt before a Combination
Issuance of Debt after a Combination






3

Ogden Enterprises is a holding company for several successful retail businesses including bookstores, pharmacies, and gourmet food shops. Ogden has excess cash and long-range plans to acquire businesses outside the retail industry. The company is currently considering the acquisition of G-Tech Inc., a company involved in the research and development of genetically engineered pharmaceuticals. G-Tech was founded 4 years ago and received its initial financing from a venture capital group. G-Tech recently submitted its first product to the Food and Drug Administration for testing and is readying a second product for submission; however, it will be several years before either of these products can be marketed. The venture capital group would like to sell the company but does not believe a public offering would do well. G-Tech is in need of cash and close monitoring to improve its operational efficiency. G-Tech is most likely to be an attractive investment to Ogden because of






4

After a merger, the difference between the value of the combined entity and the sum of the values of the separate entities is






5

Which of the following is most likely to be a bad reason for a business combination involving publicly held companies?






6

The synergy of a business combination can be determined by






7

Which of the following is not a revenue enhancement advantage of acquiring another firm?






8

A company transferred ownership of one of its divisions to the companyís existing shareholders, and the shareholders received new stock representing separate ownership rights in the division. That process is referred to as a






9

Which of the following defense maneuvers involves the issuance of rights to buy shares at an extremely reduced price upon the occurrence of a takeover?






10

A large U.S. company recently set up a new corporation based on the assets from one of its divisions. The stock of the new corporation was titled to the stockholders of the original firm. This change is an example of a






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