SUB: Take Over and Acquisition Management

Q1 (2
) Explain the principles of valuation? Marks)
Q2 (2
) Write a short note on theories of mergers and tender offers? Marks)
Q3 Explain the tax planning options and methods of payment and (2
) leverage? Marks)
Q4 (4
) Explain the following. Marks)

a) Joint Ventures.
b) ESOPs and MLPs.
c) Going Private and leveraged Buy –Outs.
d) International Mergers and Restructuring.

Q5) Describe the following Early Merger Movements? (5

Marks)

a) The 1895-1904 Merger Movement.

b) The 1922-1929 Merger Movement.
c) The 1940-1947 Merger Movement.

Q6 Write a short note on the conglomerate merger movement of (5

) the 1960s? Marks)
Q7 (4
) What are the alternative measures of the investment rate? Marks)
Q8 (5
) Describe the following phases of efficiency theories? Marks)

a) Differential efficiency
b) Inefficient Management
 c) Operating Synergy
d) Pure diversification.
e) Financial synergy.
f) Strategic realignment to changing environments
g) Under evaluation
h) Information and signaling
h) Agency problems and managerilism
i) Winners curse – hubris

(4
Q9) Describe the agency problems and managerialism? Marks)
Q10) what is the FCFH? Describe the statement of hypothesis (4
and the Marks)
evidence on the FCFH?

(4
Q11) Explain the following sources of tax planning Marks)
Market value of depreciable assets in excess of book
a) value.
b) Substantiation of capital gains for ordinary income.
c) Unused and /or unusable NOL and tax Credit –Over.
d) Uncertainty of valuation for estate purposes.
(4
Q12) Describe the role of junk bonds? Marks)
 a) Trends in the use of junk bonds.
b) Financial market setting of junk bond insurance.
c) Performance In junk bonds
d) Junk bonds and merger activity.
e) Junk bonds holdings by saving and loans.
f) Effect on other bondholders
g) Conclusions on effects of junk bonds

(4
Q13) what social /economic functions do arbitragers provide? Marks)
Q14) discuss the arguments for and against insider trading (4
legislations? Marks)
(4
Q15) what is risk Arbitrage, and what good and bad about it? Marks)
Q16) what is public choice model of SEC prosecution of insider (4
trading Marks)
set forth in Haddock and Macey (1987)?

(4
Q17) Explain History of Mergers. Marks)

a) Merger Waves.
b) What Causes Merger Waves?
c) First Wave, 1897–1904.
d) Second Wave, 1916–1929.
e) The 1940s.
f) Third Wave, 1965–1969.
g) Trend setting Mergers of the 1970s.
h) Fourth Wave, 1984–1989.
 i) Fifth Wave.

Q18) Explain the legal framework.

(4 Marks)

a) Laws Governing Mergers,

Acquisitions, and Tender
Offers.
b) Securities Laws.
c) Other Specific Takeover Rules
in the India.
d) International Securities Laws
Relating to Takeovers.
e) Business Judgment Rule.
f) State Antitakeover Laws.
g) Regulation of Insider Trading.
h) Antitrust Laws.
i) Recent Trends in Antitrust
Enforcement in the India.
j) Measuring Concentration and
Defining Market Share.
k) European Competition Policy.
l) Antitrust Remedies.

Q19) explain the following of

Employee Stock Ownership Plans.
(10 Marks)

a) Historical Growth of ESOPs.

b) Types of Plans.
c) Characteristics of ESOPs.
d) Leveraged versus Unleveraged
ESOPs.
e) Corporate Finance Uses of
ESOPs.
f) Voting of ESOP Shares.
 g) Cash Flow Implications.
h) Valuation of Stock Contributed
into an ESOP.
i) Eligibility of ESOPs.
j) Put Options of ESOPs.
k) Dividends Paid.
l) ESOPs versus a Public
Offering of Stock.
m) Employee Risk and ESOPs.
n) Securities Laws and ESOPs.
o) Tax Benefits of LESOPs.
p) Balance Sheet Effects of
ESOPs.
q) Drawbacks of LESOPs.

r) ESOPs and Corporate

Performance.
r) ESOPs as an Antitakeover
Defense.
s) ESOPs and Shareholder Wealth.
t) ESOPs and LBOs.
 SUBJECT : TAKE OVER & MERGER
Total Marks: 80

Note : All Questions are Compulsory

Each Question Carries Equal Marks 10 Marks

1. What are some reasons why a merger can increase & decrease value?

2. Define target run-up. What are some possible reasons for run-up?

3. List four methods of valuation, and briefly set forth the advantages
and Limitations of each

4. What are the advantages and disadvantages of joint ventures?

5. What were the significant tax changes involving MLPs?

6. Explain the difference between flip-in and flip-over poison pills.

7. What are the three primary forms of corporate restructuring and divestitures?

8. Discuss the effect of the following variables on merger activity:

a) The growth rate of GDP
b) Interest rate risk premiums.