Question 2: You are the CFO of a young company that has recently been listed on the stock market with great success (your stock price has grown 30% in the last year, while your industry has grown 5% on average). In the previous month you had to ask your bank for a term loan to open a new factory and, as a result, your leverage is now higher than your peers and your cash reserves are quite low. The CEO of one of your competitors has just announced that they are planning to sell the company in a public auction. You are planning to participate. Describe pros and cons of different acquisition currencies (Debt, Equity, etc.) for this deal both in general and making reference, where possible, to the concrete situation of your company.

Question 3: You have been asked to participate to a public auction to buy a company XYZ whose existing shareholder is seeking to sell. Your company is potentially interested because the business of XYZ naturally complements yours and you could extract significant synergies from a merger. Being the most pessimist member of your team you are tasked to list all the possible ways in which you could end up not merging with XYZ. You should provide at least one reason for each one of these stages:

a) During the first round.

b) During the second round

c) During the negotiation phase

d) During the closing

The reason could be due to a decision of your company, the seller or a third party. Try to be as precise as you can in describing the reasons