M&A FINAL EXAM QUESTIONS AND
CORRECT ANSWERS.
Larger companies tend to do better in Chapter 11 bankruptcy than smaller ones
True
In the United States, a company may only file for Chapter 11 Bankruptcy protection one
time
False
Which of the following factors contributed to the growth of the junk bond market?
a. development of Market Makers
(b) standardized K
C. changing risk perceptions
d. all the above
e. none of the above.
all the above
Which of the following factors contributed to the collapse of the junk bond market?
a. default of integrated resources
b. bankruptcy of Drexel Burnham Lambert
c. LTV bankruptcy
d. all of the above
all the above
Ma, Rao, and Peterson showed that the junk bond market was so resilient in the mid-1980s
that the bankruptcy of LTV had little impact on bond default probabilities.
True or False
False
The Original issue high-held bond market got its starts in the late 1970's. True or False
True
,Highly confident letters can allow small bidders to make bids for large targets. True or
False
True
the collapse of the junk bond market mainly ended the use of original issue high-held bonds
in the decades that followed. True or False
False
Witmoer research implied that the Asquith et al. study may have greatly overestimated the
risk of high yield bonds. True or False
False
Junk bond-financed takes over where mainly concentrated in specific industries that were
deregulated. True or False
False
Stapled financing is a prearranged financing package put together for potential buyers by
the seller and investment bank. True or False
True
in the years after the Great Recession, especially the years 2015 -2018, the leveraged loan
market steadily declined. True or False
False
Which of the following are examples of pension-related employee benefit plans?
a. defined benefit
b. defined contribution
c. profit shared.
d. all of the above
all the above
Kaplan and Weisbach found that diverting deals were which of the following with respect
to the likelihood of subsequent divestitures?
, a. four times more likely to be divested
b. equally likely
c. two times more likely
d. none of the above
four times more likely to be divested
which of the following are common reasons cited for selling off prior acquisition?
a. poor fit
b. poor performance
c. cash flow needs
d. all of the above
e. none of the above
all the above
involuntary divestitures generally have what effects?
a. positive
b. negative
c. non consistent effects
d. none of the above
negative
the sell-offs by Stawood followings its acquisition of Taittinger were motivated by:
a. eliminating a non-strategic component
b. eliminating a poorly performing unit
c. raising cash to pay off debt
d. none of the above
eliminating a non-strategic component
the following describes reverse synergy
a. 2+2 = 5
b. 2 +2 = 4
CORRECT ANSWERS.
Larger companies tend to do better in Chapter 11 bankruptcy than smaller ones
True
In the United States, a company may only file for Chapter 11 Bankruptcy protection one
time
False
Which of the following factors contributed to the growth of the junk bond market?
a. development of Market Makers
(b) standardized K
C. changing risk perceptions
d. all the above
e. none of the above.
all the above
Which of the following factors contributed to the collapse of the junk bond market?
a. default of integrated resources
b. bankruptcy of Drexel Burnham Lambert
c. LTV bankruptcy
d. all of the above
all the above
Ma, Rao, and Peterson showed that the junk bond market was so resilient in the mid-1980s
that the bankruptcy of LTV had little impact on bond default probabilities.
True or False
False
The Original issue high-held bond market got its starts in the late 1970's. True or False
True
,Highly confident letters can allow small bidders to make bids for large targets. True or
False
True
the collapse of the junk bond market mainly ended the use of original issue high-held bonds
in the decades that followed. True or False
False
Witmoer research implied that the Asquith et al. study may have greatly overestimated the
risk of high yield bonds. True or False
False
Junk bond-financed takes over where mainly concentrated in specific industries that were
deregulated. True or False
False
Stapled financing is a prearranged financing package put together for potential buyers by
the seller and investment bank. True or False
True
in the years after the Great Recession, especially the years 2015 -2018, the leveraged loan
market steadily declined. True or False
False
Which of the following are examples of pension-related employee benefit plans?
a. defined benefit
b. defined contribution
c. profit shared.
d. all of the above
all the above
Kaplan and Weisbach found that diverting deals were which of the following with respect
to the likelihood of subsequent divestitures?
, a. four times more likely to be divested
b. equally likely
c. two times more likely
d. none of the above
four times more likely to be divested
which of the following are common reasons cited for selling off prior acquisition?
a. poor fit
b. poor performance
c. cash flow needs
d. all of the above
e. none of the above
all the above
involuntary divestitures generally have what effects?
a. positive
b. negative
c. non consistent effects
d. none of the above
negative
the sell-offs by Stawood followings its acquisition of Taittinger were motivated by:
a. eliminating a non-strategic component
b. eliminating a poorly performing unit
c. raising cash to pay off debt
d. none of the above
eliminating a non-strategic component
the following describes reverse synergy
a. 2+2 = 5
b. 2 +2 = 4
