Practice Questions Exam 3 PDF
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This document contains practice questions related to mergers and acquisitions (M&A) and equity offerings. The questions cover topics such as the value creation by M&A, the winner's curse, and the impact of seasoned equity offerings on share prices.
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1. M&A: Does M&A create value for shareholders? 2. M&A: Why does the management of companies that become target in an M&A sometimes object to a takeover, even though this is good for the target's shareholders? How can a golden parachute/handshake help in solving this issue? 3. M&A:...
1. M&A: Does M&A create value for shareholders? 2. M&A: Why does the management of companies that become target in an M&A sometimes object to a takeover, even though this is good for the target's shareholders? How can a golden parachute/handshake help in solving this issue? 3. M&A: What is the winner's curse in M&A? 4. M&A: If you are the acquirer in an M&A transaction, would you pay with your own stock or with cash for the target, when you think your own firm is overvalued? 5. M&A: Why should you (as the acquirer) pay with cash in an M&A transaction, if the target is undervalued. 6. Equity offerings: What is the idea behind the "greenshoe" in IPOs or seasoned equity offerings? 7. Equity offerings: Why has the number of publicly listed firms in the US declined in the last 25 years? 8. Equity offerings: Why does the share price of a firm that is announcing a seasoned equity offering on average fall on the day such a seasoned equity offering is announced?
