FINA 415 Midterm Exam Questions with Verified Solutions
1) Schedule TO regulates? 1 Mark
a. Take Overs
b. Take outs
c. Try outs
d. Tenders
e. None of the above
2) Most US Corporations are registered in 1 Mark
a. Washington DC
b. Delaware
c. California
d. Dakota
e. New York
3) If a Company accumulates shares in the market with a view to launching a
friendly takeover, but fails in that bid, it may
1 mark
a. Remain a minority shareholder
b. Launch a Proxy
c. Sell its position
d. Launch a Tender
e. All of the above
4) The Sherman Act, Clayton Act, Hart-Scott-Rodino Act are all considered 1 Mark
a. Securities Acts
b. Anti-Trust Laws
c. State antitakeover Acts
d. None of the above
5) What is the principal body for scrutinizing foreign investment and takeovers in the US?
1 Mark
CIFUS – Committee on Foreign Investment into the US
6) A “Freeze out” allows 1 Mark
a. Directors to block a poison pill
b. Activists to launch a Proxy
c. An acquiror to buy out any remaining shares after a successful Tender Offer
d. The FTC to block a deal
e. None of the above
, 7) Which of the following is NOT an Antitakeover defense? 1 Mark
a. Dead Hand
b. Red Right Hand
c. White Squire
d. Pac-Man
e. Just-say No
8) A secondary offering occurs when Too Obscure 1 Mark
a. A Subsidiary company sells shares during a carve out
b. A Parent Co sells shares during a carve out
c. A subsidiary dilutes its parent
d. A Raider acquires a Greenshoe
e. None of the above
9) You are the CEO of a firm and have just launched a bid for another company at $40
a share. You are surprised to see the target’s price jump to $45 a share. Why is this?
1 mark
a. The market doesn’t expect you to buy the company
b. The market expects a further offer
c. The market thinks your offer is too low
d. The market expects the target to buy you
e. None of the above
10) Your bid in #9 fails, but your share prices rises ABOVE where it was previously trading.
Why? 1 Mark
a. The market was relieved you didn’t succeed
b. You are now in play
c. The market is rewarding you for trying to do something
d. All of the above
e. None of the above
11) When Tyco created $30 Bn in goodwill following $30 Bn in acquisitions, this showed that
Tyco was 1 Mark
a. Getting economies of Scale out of the deals
b. Getting Economies of Scope out of the deals
c. Overpaying for the deal
d. Benefiting from momentum investing
e. Breaking the law
1) Schedule TO regulates? 1 Mark
a. Take Overs
b. Take outs
c. Try outs
d. Tenders
e. None of the above
2) Most US Corporations are registered in 1 Mark
a. Washington DC
b. Delaware
c. California
d. Dakota
e. New York
3) If a Company accumulates shares in the market with a view to launching a
friendly takeover, but fails in that bid, it may
1 mark
a. Remain a minority shareholder
b. Launch a Proxy
c. Sell its position
d. Launch a Tender
e. All of the above
4) The Sherman Act, Clayton Act, Hart-Scott-Rodino Act are all considered 1 Mark
a. Securities Acts
b. Anti-Trust Laws
c. State antitakeover Acts
d. None of the above
5) What is the principal body for scrutinizing foreign investment and takeovers in the US?
1 Mark
CIFUS – Committee on Foreign Investment into the US
6) A “Freeze out” allows 1 Mark
a. Directors to block a poison pill
b. Activists to launch a Proxy
c. An acquiror to buy out any remaining shares after a successful Tender Offer
d. The FTC to block a deal
e. None of the above
, 7) Which of the following is NOT an Antitakeover defense? 1 Mark
a. Dead Hand
b. Red Right Hand
c. White Squire
d. Pac-Man
e. Just-say No
8) A secondary offering occurs when Too Obscure 1 Mark
a. A Subsidiary company sells shares during a carve out
b. A Parent Co sells shares during a carve out
c. A subsidiary dilutes its parent
d. A Raider acquires a Greenshoe
e. None of the above
9) You are the CEO of a firm and have just launched a bid for another company at $40
a share. You are surprised to see the target’s price jump to $45 a share. Why is this?
1 mark
a. The market doesn’t expect you to buy the company
b. The market expects a further offer
c. The market thinks your offer is too low
d. The market expects the target to buy you
e. None of the above
10) Your bid in #9 fails, but your share prices rises ABOVE where it was previously trading.
Why? 1 Mark
a. The market was relieved you didn’t succeed
b. You are now in play
c. The market is rewarding you for trying to do something
d. All of the above
e. None of the above
11) When Tyco created $30 Bn in goodwill following $30 Bn in acquisitions, this showed that
Tyco was 1 Mark
a. Getting economies of Scale out of the deals
b. Getting Economies of Scope out of the deals
c. Overpaying for the deal
d. Benefiting from momentum investing
e. Breaking the law
