|
LOS o: Describe the empirical evidence related to the distribution of benefits in a merger.
Q1. Which of the following statements regarding the distribution of the benefits from a merger are least accurate?
A) Long-term performance following a merger transaction suggests that the acquiring firm is unable to capture the synergies expected prior to the merger.
B) The winners curse implies that in a contested takeover, on average, the winning bidder overpays for the target.
C) Short-term performance around the date of a merger suggests that target management suffers from reference dependence in attempting to extract value for shareholders.
Q2. Empirical evidence suggests that the majority of the benefits from a merger accrue to the target firm’s shareholders. What does this suggest about the outcome of a competitive bidding process, and what does this imply with regard to the payment strategy and bidding strategy for prospective acquirers? It suggests that the:
A) winner’s curse is real, that the preferred payment method in competitive bidding should be stock, and that the bidder should be prepared to withdraw if the probable cost exceeds the target’s pre-merger value plus estimated synergies.
B) target’s management is infected with pride, that the preferred payment method in competitive bidding should be stock, and that the bidder should be prepared to withdraw if the probable cost exceeds the target’s pre-merger value plus estimated synergies.
C) winner’s curse is real, that the preferred payment method in competitive bidding should be cash, and that the bidder should be prepared to withdraw if the probable cost exceeds the target’s pre-merger value plus estimated synergies.
Q3. Based upon short-term stock performance around the merger date, academic studies concerning the distribution of the benefits suggest that:
A) both parties usually gain value.
B) the target usually loses value, but the acquirer usually gains value.
C) the acquirer usually loses value, but the target usually gains value.
Q4. Based upon long-term stock performance following a merger, academic studies suggest that acquirers:
A) moderately outperform their peers, with slightly more than half exceeding their group
.B) moderately underperform their peers, with slightly more than half lagging their group.
C) significantly underperform their peers, with more than 60% lagging their group. | 
发表于 2009-3-3 16:48
| 
