21. A company that brings together a broad range of businesses is considered: (2

Question

21. A company that brings together a broad range of businesses is considered: (2 points) a. Horizontally integrated b. A conglomerate c. An oligopoly d. Vertically integrated 22. Which of the following M&A; scenarios tends to use an all-stock consideration and offer little to no premium to the target company shareholders? 2 points) a. Horizontal integration b. Vertical integration c. Merger of equals d. Forward integration 23. In a football field graphic for an M&A; transaction, which of the following is a proxy for (2 points) what a financial buyer would be willing to pay for the company? a. Precedent transactions analysis b. DCF c. LBO d. Comparable companies analysis 24. When is an all-stock merger accretive? 2 points) a. Acquirer's pro forma EPS is lower b. Target's P/E is higher than acquirer's c. Acquirer's P/E is lower than target's d. Acquirer's P/E is higher than targets 25. All of the following are intangible assets EXCEPYT (2 points) a. Brand b. Patents c. PP&E; d. Copyrights 26. Why are certain companies sometimes grouped into different "tiers" when presenting the results of a Comparable Companies Analysis? 2 points) BFIN 7225 Final Exam - Fall 2017 20171030.docx Page 5 of 10

Explanation / Answer

As per rules I will do the first 4 sub-parts of this question.

21- Conglomerate

(Conglomerate is a combination of companies that are engaged in diverse businesses. For instance- Reliance Company)

22. Merger of equals

(The parent company simply purchases a majority of common shares of the target company and the premium received by sellers is small compared to the takeover premium)

23. LBO

(Leveraged buyout is a method used to value a company. The result of analysis is displayed on the football field graph)

24. d- Acquirer P/E is higher than the target

(an accretive merger or acquisition occurs when the price-earnings (P/E) ratio of the acquiring firm is greater than that of the target firm. It increases the acquiring company's EPS)

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