FIN /
461
/ /
Exam
/ //
1 /
Miami
/ /
University Questions With Correct Answers
/ // // // //
Why //does //M&A //tend //to //occur //in //waves?
(1) /
/Cyclical /
/patterns /
/with //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
(1) //Liquidity; //most //recent //factor //in //M&A //wave
(2) //Disruptive //Technology; //1990's
(3) //Regulation/Deregulation; //1980's
(4) //'Shocks'; //oil //prices, //recent //trends //with //SPACs/ESG
Motives //for //why //firms //engage //in //M&A //transactions
(1) //Synergies
(2) //Diversification
Main //M&A //players //and //their //roles
1. //Identify //strategic //alternatives
2. //Value //maximization, //3.speed //of //execution
4. //Certainty //of //completion
Horizontal //Integration
driven //by //economies //of //scale //& //scope
,Vertical //Integration
motive //is //greater //control //over //production //and //distribution
Backward //Integration //(Vertical //Integration)
upstream; //raw //material //supplies, //manufacturing/production
Forward //Integration //(Vertical //Integration)
downstream; //distribution, //end //user
Conglomeration
driven //by //desire //to //diversify
Who //wins //in //an //M&A //transaction?
the //target //firm //(targets //shareholders //make //better //returns)
Who //loses //in //an //M&A //transaction?
the /
/acquiring /
/firm; /
/returns /
/are /
/negative /
/however, /
/positive /
/returns //for //acquirer //are //situational //and //include //the //target, //size, //and //consideration
What //factors //DO //matter //in //creating //value //for //the //acquirer?
(1) //Financing //structure
(2) //Target //company //status
(3) //Earnings //growth
(4) //Foreign //vs //domestic //acquisitions
What //factors //DO //NOT //matter //in //creating //value //for //the //acquirer?
(1) //EPS //impact
(2) //Transaction //size
(3) //Profitability //& //volatility
(4) //Credit //rating //impact
(5) //Industry
, The //functions //performed //by //investment //banks
(1) //M&A //advisory
(2) //Underwriting
(3) //Sales //& //Trading
(4) //Research
(5) //Syndicate
How //do //investment //banks //get //paid //for //their //work?
different //fees //for //advising //and //providing //fairness //opinion
The //role //played //by //investment //banks //in //M&A //transactions
(1) //Identify //strategic //alternatives
(2) //Value //maximization
(3) //Speed //of //execution
(4) //Certainty //of //completion
League //tables
list /
/of /
/investment /
/banks /
/that /
/ranks /
/them /
/in /
/terms /
/of /
/fees /
/generated. //Tracks //activities //of //investment //banks //like //M&A //deals //and //valuation //of //banks
Different //ways //to //sell //a //firm
1. //Private //negotiation(one //on //one)
2. //Targeted //auction(contact //specific //bidders)
3. //Broad //auction(contact //a //lot //of //bidders)
4. //Unsolicited //expression //of //interest(buyer //is //after //seller //when //seller //isn't //even //selling)
M&A //Sale //process
461
/ /
Exam
/ //
1 /
Miami
/ /
University Questions With Correct Answers
/ // // // //
Why //does //M&A //tend //to //occur //in //waves?
(1) /
/Cyclical /
/patterns /
/with //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
(1) //Liquidity; //most //recent //factor //in //M&A //wave
(2) //Disruptive //Technology; //1990's
(3) //Regulation/Deregulation; //1980's
(4) //'Shocks'; //oil //prices, //recent //trends //with //SPACs/ESG
Motives //for //why //firms //engage //in //M&A //transactions
(1) //Synergies
(2) //Diversification
Main //M&A //players //and //their //roles
1. //Identify //strategic //alternatives
2. //Value //maximization, //3.speed //of //execution
4. //Certainty //of //completion
Horizontal //Integration
driven //by //economies //of //scale //& //scope
,Vertical //Integration
motive //is //greater //control //over //production //and //distribution
Backward //Integration //(Vertical //Integration)
upstream; //raw //material //supplies, //manufacturing/production
Forward //Integration //(Vertical //Integration)
downstream; //distribution, //end //user
Conglomeration
driven //by //desire //to //diversify
Who //wins //in //an //M&A //transaction?
the //target //firm //(targets //shareholders //make //better //returns)
Who //loses //in //an //M&A //transaction?
the /
/acquiring /
/firm; /
/returns /
/are /
/negative /
/however, /
/positive /
/returns //for //acquirer //are //situational //and //include //the //target, //size, //and //consideration
What //factors //DO //matter //in //creating //value //for //the //acquirer?
(1) //Financing //structure
(2) //Target //company //status
(3) //Earnings //growth
(4) //Foreign //vs //domestic //acquisitions
What //factors //DO //NOT //matter //in //creating //value //for //the //acquirer?
(1) //EPS //impact
(2) //Transaction //size
(3) //Profitability //& //volatility
(4) //Credit //rating //impact
(5) //Industry
, The //functions //performed //by //investment //banks
(1) //M&A //advisory
(2) //Underwriting
(3) //Sales //& //Trading
(4) //Research
(5) //Syndicate
How //do //investment //banks //get //paid //for //their //work?
different //fees //for //advising //and //providing //fairness //opinion
The //role //played //by //investment //banks //in //M&A //transactions
(1) //Identify //strategic //alternatives
(2) //Value //maximization
(3) //Speed //of //execution
(4) //Certainty //of //completion
League //tables
list /
/of /
/investment /
/banks /
/that /
/ranks /
/them /
/in /
/terms /
/of /
/fees /
/generated. //Tracks //activities //of //investment //banks //like //M&A //deals //and //valuation //of //banks
Different //ways //to //sell //a //firm
1. //Private //negotiation(one //on //one)
2. //Targeted //auction(contact //specific //bidders)
3. //Broad //auction(contact //a //lot //of //bidders)
4. //Unsolicited //expression //of //interest(buyer //is //after //seller //when //seller //isn't //even //selling)
M&A //Sale //process
