1. Choose the statement that is not an appropriate reason for an acquisition to fail

1. Diversification benefits that is said to create value for their shareholders is illusory.
2. The acquiring and target companies have different costs of capital
3. Synergies are not realized
4. The acquiring company overpays for the target company
5. Cultural clashes lead to inefficiencies

2. Choose the most appropriate statement regarding financing options for firms.

1. Convertible bonds and convertible shares are hybrids of stocks and bonds.
2. Money raised through share issues need not be repaid.
3. Debt is a form of liability that has a variable rate of return.
4. Cost of funds raised through a bond issue is higher than the cost of funds raised through a share issue.
5. Companies must always pay dividends to reward shareholders.

3. Choose all that are appropriate statements regarding the effects of signaling in the stock market.

1. The announcement of increased profits cause an increase in the stock price.
2. The stock price of a firm reporting earnings that are only a few cents below their previous estimates often go down by substantial amounts.
3. The announcement of share buyback leads to an increase in the share price.
4. The announcement of a tender offer causes an increase in the stock price of the target company.
5. The issue of equity often cause a company's stock price to decrease.

4. Choose all that are appropriate.

1. Private equity provides equity or debt financing to private companies outside the public capital markets.
2. Most equity research analysts are employed by (and receive their paychecks from) industrial companies.
3. When a firm is planning an IPO, the buy-side will help the firm sell the shares.
4. Low-ranking analysts could make outlandish and contrary predictions, hoping that a lucky break will propel them to the top of the rankings
5. Analysts are often afraid to recommend sell for a company's stock because that company may not do business with their employer in the future.

5. A firm has to choose how to allocate free cash flows among organic growth, dividends, and share buybacks. If a firm that has a free cashflow of $1 million has the opportunity to: invest $1 million in a new product that will earn cashflow with a present value of $0.9 million; offer a $1 dividend to each of its one million shareholders; or buy back 100,000 shares at $10 each, choose all options that are not value-creating.

1. Conduct the share buyback program costing $1 million.
2. Offer a $0.50 dividend and use the remaining $500,000 to purchase 50,000 shares.
3. Distribute $1 million in dividends.
4. Use the $1 million to invest in the new product.
5. Retain $1 million for other investment opportunities.

pleas, thank you