Question
How can I solve these? Pleas help me! 1. Which of the following is true about the implied price of the target? A) If the
How can I solve these? Pleas help me!
1. Which of the following is true about the implied price of the target?
A) If the target's market price per share is lower than the implied price, the target is overvalued
B) If the target's market price per share is higher than its implied price, the target is overvalued
C) If the target's market price per share is higher than its implied price, the target is undervalued
D) None of the above
6. Which of the following is NOT true about real options analysis?
A) It is appropriate when a company has investment opportunities with optionslike features
B) Many analysts lack the knowledge and expertise to use the method properly
C) It is most often used as a standalone valuation method
D) It works best when there is uncertainty, investment occurs in stages, and there are multiple rounds of financing
7. A newly purchased asset costs $60,000, and has 10 years of useful life with an estimated $10,000 of salvage value at the end of its useful life. Using the straightline method, what is its depreciation expense every year?
A) $2,500 B) $5,000 C) $6,000 D) $12,000
8. When considering the question of "what is a good choice for an M&A", which is NOT a main issue to judge potential targets on?
A) Potential synergy B) The ability to realize potential synergy C) Strategic alternatives D) Post-merger implementation problems
9. Which of the following is NOT a reason why negotiations fail?
A) Both parties neglect to devise an action plan for the integration B) There is limited flexibility to each party's position C) There is too much pressure to close the deal quickly D) Key players involved in crafting the deal are not involved with or held responsible for the implementation
10. Which of the following is NOT a stage of how cultural clash unfolds? A) Stereotypes B) Escalation C) Perceived differences D) Putdowns
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