Question
Can you please provide the answer to the following :) Q1 Which of the following statements accurately describe characteristic(s) of break-even analysis as it is
Can you please provide the answer to the following :)
Q1 Which of the following statements accurately describe characteristic(s) of break-even analysis as it is conducted with respect to project evaluation?
a) It is a technique that requires no knowledge of the underlying distribution of the variables that contribute to the wealth impact of the project.
b) It involves changing each variable that impacts upon the project by an amount that reflects the same probability of occurring for both optimistic and pessimistic
estimates.
c) It provides an analysis of the change in a variable required (from its expected value) in order to induce a zero NPV from the project.
d) More than one of the above statements are correct.
e) None of the above statements are correct.
Q2. Which of the following statements accurately describes a potential challenge(s) in using decision trees to estimate the value of a real option?
a) Its often not clear whether an option to expand is a call or a put option.
b) A decision tree allows for only a discrete set of cash flow outcomes which may not accurately reflect the range of outcomes that might occur.
c) A decision tree can suggest that an option has no value because there is no point at which it seems to be optimal for it to be exercised whereas in reality there are
circumstances where it may be optimal to exercise the option.
d) More than one of the above.
e) None of the above.
Q3 Which of the following statements is consistent with the Eggleston principles of the regulation of takeover activity?
a) Bidder shareholders should have enough time to decide whether they want to accept a bid
b) All target firm shareholders should have the opportunity to participate in any control premium that is paid
c) Takeovers should not be allowed to proceed unless target shareholders receive at least as much of the synergistic benefits as bidder shareholders receive
d) More than one of the above.
e) None of the above.
Q4. Which of the following statements accurately describes features of off-market takeovers in the Australian context?
a) If the bidder increases the price they are willing to pay target shareholders then only those shareholders that accept subsequent to the increase in the bid price receive the
increased price.
b) Only cash can be offered as consideration when it is an off-market takeover bid
c) A bidder may acquire majority control of the target company under an off market bid by only offering to purchase the shares of a select group of investors.
d) More than one of the above.
e) None of the above.
Q5. Which of the following statements accurately describes features often associated with poison pill defences?
a) They are designed to reduce the value of the company when control of the company passes to a hostile acquirer.
b) When triggered the company is automatically wound up by administrators
c) They involve a friendly third party selling down their ownership in the target firm so that they no longer own a significant blocking stake
d) More than one of the above.
e) None of the above.
Q6 Which of the following statements accurately describes the NET COST of a takeover where the consideration offered is cash only?
a) It represents the share of the synergistic benefits that has been captured by acquiring shareholders
b) To measure it properly requires an accurate measure of the value of the target operating independent of the takeover bid
c) As the proportion of the post-acquisition combined firm offered to target shareholders increases, the net cost also increases (all other factors remaining constant).
d) More than one of the above.
e) None of the above.
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