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92. Firm B's 1 million shares of stock currently sell for $20 each. Firm A estimates the
economic gain from the merger to be $10 million and is prepared to offer $22 cash for each share
of B. What percentage of the merger gain will be captured by firm B's shareholders?
93. Which one of the following statements is most apt to apply to a firm that has made a
cash tender offer for 2 million shares of ABC Corp. at a price of $20, which is $6 higher than
ABC's current value?
94. A merger is expected to produce cost savings of $50 million and the acquired firm's
shareholders will receive a premium of 20% over the $150 million value of their firm. The gain of
the merger to the acquirer is:
95. Which one of the following is
not
a method of changing the management of a firm?
96. Which one of the following is correct concerning a spin-off?
97. Splitting one firm into four separate firms is an example of a:
98. The merger between Uptown Bank and Downtown Bank is an example of a:
99. If Microsoft were to acquire Dell Computer, it would be an example of a:
100. Conglomerate mergers involve companies in:
101. A merger adds value by creating synergies. Which one of these is
not
a possible source of
synergy?
102. Which one of the following is the most appropriate reason for an acquiring firm's
shareholders to prefer using stock financing for acquisitions?
103. Which one of the following statements is correct for a firm that has undergone a
leveraged buyout?
104. Empirical studies show that the operating efficiency of firms having undergone a leverage
buyout ______ over the following 3 years.
105. What are the common motivations for leveraged and management buyouts of the firm?
106. How should the gains and costs of mergers to the acquiring firm be measured?
107. Describe the basic differences between mergers, leveraged buyouts, management
buyouts, divestitures, and spin-offs.
108. Briefly discuss some of the more logical reasons for mergers to occur.
109. After analyzing the particulars of firms A and B and their proposed merger, comment on
the desirability of the merger:
