6.With regard to Nocci’s description of the types of takeover defenses he would prefer to avoid, he is:

A)   correct with respect to the poison pill defense, but incorrect with respect to the pac-man defense.

B)   incorrect with respect to the poison pill defense, and incorrect with respect to the pac-man defense.

C)   incorrect with respect to the poison pill defense, but correct with respect to the pac-man defense.

D)   correct with respect to the poison pill defense, and correct with respect to the pac-man defense.

7.With respect to antitrust challenges in the United States, Palocci should have told Nocci that the decision to challenge is based upon a:

A)   quantitative measure of industry concentration, and that the issue is clear-cut once the change in the measure is known.

B)   quantitative measure of industry concentration, but that the issue is not clear-cut.

C)   qualitative measure of industry concentration, but that the issue is not clear-cut.

D)   qualitative measure of industry concentration, and that the issue is clear-cut once the change in the measure is mapped into a value grid.

8.Food Tree is likely to have to evaluate potential acquisition targets that are temporarily experiencing financial distress or earnings problems that can be solved with an application of the Tree’s financial strength and management expertise. That said, the food industry, by and large, consists of firms that have relatively predictable revenue and cost patterns, and the level of investment risk is well-understood. All else being equal this set of circumstances would seem to argue for which of the following valuation approaches?

A)   Discounted cash flow.

B)   Comparable company.

C)   Comparable transaction.

D)   Relative value.

9.Suppose that Drug Tree has identified three comparable companies relative to a target under evaluation. The valuation metric is price to sales. The three comparable companies have price-to-sales (P/S) ratios of 2.17, 1.98, and 2.09. The target has sales of

答案和详解如下：

6.With regard to Nocci’s description of the types of takeover defenses he would prefer to avoid, he is:

A)   correct with respect to the poison pill defense, but incorrect with respect to the pac-man defense.

B)   incorrect with respect to the poison pill defense, and incorrect with respect to the pac-man defense.

C)   incorrect with respect to the poison pill defense, but correct with respect to the pac-man defense.

D)   correct with respect to the poison pill defense, and correct with respect to the pac-man defense.

The correct answer was A)

Nocci is correct with respect to the poison pill defense. It is a pre-offer defense that can make an acquisition prohibitively expensive. The pac-man defense is a post-offer defense. It involves the acquisition target turning the table and attempting to acquire the firm that is making the offer.

7.With respect to antitrust challenges in the United States, Palocci should have told Nocci that the decision to challenge is based upon a:

A)   quantitative measure of industry concentration, and that the issue is clear-cut once the change in the measure is known.

B)   quantitative measure of industry concentration, but that the issue is not clear-cut.

C)   qualitative measure of industry concentration, but that the issue is not clear-cut.

D)   qualitative measure of industry concentration, and that the issue is clear-cut once the change in the measure is mapped into a value grid.

The correct answer was B)

Palocci should have told him that the decision to challenge is based upon a quantitative measure of industry concentration, but that the issue is not necessarily clear-cut.

8.Food Tree is likely to have to evaluate potential acquisition targets that are temporarily experiencing financial distress or earnings problems that can be solved with an application of the Tree’s financial strength and management expertise. That said, the food industry, by and large, consists of firms that have relatively predictable revenue and cost patterns, and the level of investment risk is well-understood. All else being equal this set of circumstances would seem to argue for which of the following valuation approaches?

A)   Discounted cash flow.

B)   Comparable company.

C)   Comparable transaction.

D)   Relative value.

The correct answer was A)

If a firm is in financial distress or experiencing earnings problems, this will make it difficult to apply the comparable company or comparable transaction approaches. However, if the firm can be restored to health and future cash flows and risks are fairly predictable, this implies that discounted cash flow valuation may provide the best results. Relative value is not a term that is typically applied to merger target valuation, though it is a general description of both the comparable company and comparable transaction approaches.

9.Suppose that Drug Tree has identified three comparable companies relative to a target under evaluation. The valuation metric is price to sales. The three comparable companies have price-to-sales (P/S) ratios of 2.17, 1.98, and 2.09. The target has sales of