FIN 461 Exam 1 Miami University Questions &
Answers Latest Update
Terms in this set (70)
(1) Cyclical patterns with strong correlation between
Why does M&A tend to S&P performance and the amount of M&A activity.
occur in waves? (2) Companies can use their stock to make
acquisitions when their stock price is high.
(1) Liquidity; most recent factor in M&A wave
(2) Disruptive Technology; 1990's
4 Factors that contribute
(3) Regulation/Deregulation; 1980's
to M&A waves
(4) 'Shocks'; oil prices, recent trends with
SPACs/ESG
Motives for why firms (1) Synergies
engage in M&A (2) Diversification
transactions
1. Identify strategic alternatives
Main M&A players and
2. Value maximization, 3.speed of execution
their roles
4. Certainty of completion
Horizontal Integration driven by economies of scale & scope
motive is greater control over production and
Vertical Integration
distribution
, Backward Integration upstream; raw material supplies,
(Vertical Integration) manufacturing/production
Forward Integration downstrea m; distribution, end user
(Vertical Integration)
Conglomeration driven by desire to diversify
Who wins in an M&A the target firm (targets shareholde rs make better
transaction? returns)
the acquiring firm; returns are negative however,
Who loses in an M&A
positive returns for acquirer are situational and
transaction?
include the target, size, and consideration
(1) Financing structure
What factors DO matter
(2) Target company status
in creating value for the
(3) Earnings growth
acquirer?
(4) Foreign vs domestic acquisitions
(1) EPS impact
What factors DO NOT (2) Transaction size
matter in creating value (3) Profitability & volatility
for the acquirer? (4) Credit rating impact
(5) Industry
(1) M&A advisory
(2) Underwriting
The functions performed
(3) Sales & Trading
by investment banks
(4) Research
(5) Syndicate
How do investment different fees for advising and providing fairness
banks get paid for their opinion
work?
(1) Identify strategic alternatives
The role played by
(2) Value maximization
investment banks in M&A
(3) Speed of execution
transactions
(4) Certainty of completion
list of investment banks that ranks them in terms of
League tables fees generated. Tracks activities of investment banks
like M&A deals and valuation of banks
Answers Latest Update
Terms in this set (70)
(1) Cyclical patterns with strong correlation between
Why does M&A tend to S&P performance and the amount of M&A activity.
occur in waves? (2) Companies can use their stock to make
acquisitions when their stock price is high.
(1) Liquidity; most recent factor in M&A wave
(2) Disruptive Technology; 1990's
4 Factors that contribute
(3) Regulation/Deregulation; 1980's
to M&A waves
(4) 'Shocks'; oil prices, recent trends with
SPACs/ESG
Motives for why firms (1) Synergies
engage in M&A (2) Diversification
transactions
1. Identify strategic alternatives
Main M&A players and
2. Value maximization, 3.speed of execution
their roles
4. Certainty of completion
Horizontal Integration driven by economies of scale & scope
motive is greater control over production and
Vertical Integration
distribution
, Backward Integration upstream; raw material supplies,
(Vertical Integration) manufacturing/production
Forward Integration downstrea m; distribution, end user
(Vertical Integration)
Conglomeration driven by desire to diversify
Who wins in an M&A the target firm (targets shareholde rs make better
transaction? returns)
the acquiring firm; returns are negative however,
Who loses in an M&A
positive returns for acquirer are situational and
transaction?
include the target, size, and consideration
(1) Financing structure
What factors DO matter
(2) Target company status
in creating value for the
(3) Earnings growth
acquirer?
(4) Foreign vs domestic acquisitions
(1) EPS impact
What factors DO NOT (2) Transaction size
matter in creating value (3) Profitability & volatility
for the acquirer? (4) Credit rating impact
(5) Industry
(1) M&A advisory
(2) Underwriting
The functions performed
(3) Sales & Trading
by investment banks
(4) Research
(5) Syndicate
How do investment different fees for advising and providing fairness
banks get paid for their opinion
work?
(1) Identify strategic alternatives
The role played by
(2) Value maximization
investment banks in M&A
(3) Speed of execution
transactions
(4) Certainty of completion
list of investment banks that ranks them in terms of
League tables fees generated. Tracks activities of investment banks
like M&A deals and valuation of banks
