Finance-2, ACCT3004, George Brown College,Canada, Fall-2021

Easy type Questions:

1. EXPLAIN WHY DIVERSIFICATION PER SE IS PROBABLY NOT A GOOD REASON FOR A MERGER. (250-300 words)

2. DESCRIBE THE ADVANTAGES AND THE DISADVANTAGES OF A TAXABLE MERGER AS OPPOSED TO A TAX-FREE EXCHANGE. WHAT IS THE BASIC DETERMINANT OF A TAX STATUS IN A MERGER? WOULD AN LBO BE TAXABLE OR NON TAXABLE? EXPLAIN. (250-300 words)

3. SUPPOSE A COMPANY IN WHICH YOU OWN STOCK HAS ATTRACTED TWO TAKEOVER OFFERS. WOULD IT EVER MAKE SENSE FOR YOUR COMPANYS MANAGEMENT TO FAVOUR THE LOWER OFFER? DOES THE FORM OF PAYMENT AFFECT YOUR ANSWER AT ALL? (250-300 words)