FIN 461 FINAL Exam Miami University (BOULTON): FINAL EXAM QUESTIONS AND ANSWERS GRADED A+ 2025 VERSION

FIN 461 FINAL
Exam Miami




A
VI
University
TU
(BOULTON): FINAL
IS
EXAM QUESTIONS
M
O


AND ANSWERS
A
N




GRADED A+ 2025
JP




VERSION

, Why does M&A tend to occur in waves? - ANSWER (1) Strong correlation between
S&P performance and the amount of M&A activity.
(2) Companies can use their stock to make acquisitions when their stock price is high.

4 Factors that contribute to M&A waves - ANSWER (1) Liquidity; most recent factor
in M&A wave




A
(2) Disruptive Technology; 1990's
(3) Regulation/Deregulation; 1980's
(4) 'Shocks'; oil prices




VI
Motives for why firms engage in M&A transactions - ANSWER (1) Synergies
(2) Diversification




TU
Horizontal Integration - ANSWER driven by economies of scale & scope

Vertical Integration - ANSWER motive is greater control over production and
distribution
IS
Backward Integration (Vertical Integration) - ANSWER upstream; raw material
supplies, manufacturing/production
M
Forward Integration (Vertical Integration) - ANSWER downstream; distribution, end
user
O


Conglomeration - ANSWER driven by desire to diversify

Who wins in an M&A transaction? - ANSWER the target firm
A



Who loses in an M&A transaction? - ANSWER the acquiring firm
N




What factors DO matter in creating value for the acquirer? - ANSWER (1) Financing
structure
JP




(2) Target company status
(3) Earnings growth
(4) Foreign vs domestic acquisitions

What factors DO NOT matter in creating value for the acquirer? - ANSWER (1) EPS
impact
(2) Transaction size
(3) Profitability & volatility
(4) Credit rating impact
(5) Industry