M&A Modeling Exam: Mergers & Acquisitions Practice Questions with Verified Solutions

M&A MODELING EXAM | MERGERS &
ACQUISITIONS WITH PRACTICE QUESTIONS
WITH VERIFIED SOLUTIONS


ABC Co. is considering an acquisition of XYZ Co. for a cash offer that
values XYZ at 20% higher than its current market capitalization. Given
the above data, calculate the takeover premium in dollar terms (Round to
the closest dollar).

ABC Co. Stock Price

$26.00

XYZ Co. Stock Price

$10.00

ABC Co. Cash

$2,000,000

XYZ Co. Cash

$1,500,000

ABC Co. Shares Outstanding

1 | Pa g e

,300,000

XYZ Co. Shares Outstanding

150,000



A. $400,000

B. $250,000

C. $300,000

D. $315,000 - ✔✔✔ANSWER-C. $300,000

Given the data in the above table, calculate equity value per share of this
hypothetical company. (Round to 2 decimal points)

Shares outstanding

150,000

Cash

120,000

Tax Rate

6%

Discount Rate

2%

2 | Pa g e

, Enterprise Value

300,000

Debt

90,000

Perpetual Growth Rate

5%



A. $2.20

B. $2.50

C. $3.00

D. $2.00 - ✔✔✔ANSWER-A. $2.20




Which of the following OFFSET functions when applied correctly in cell
H10 allows the user to fill down cells H11-17 with CTRL+D?

A. =OFFSET(I10,0,$H$7-1)

B. =OFFSET(I10,1,$H$7-1)

C. =OFFSET(I10,0,H7-1)



3 | Pa g e