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Mergers & Inquisitions Questions & Correct Answers Pack / Graded A+
Mergers & Inquisitions Questions & Correct Answers Pack / Graded A+
[Show more]Mergers & Inquisitions Questions & Correct Answers Pack / Graded A+
[Show more]Why would one company want to buy another company? 
: A company might want to buy another company if it is looking to expand its market share, 
product offerings, customer base and distribution channels. Through expanding in these ways, the 
company expects to increase its EPS and that the investm...
Preview 3 out of 24 pages
Add to cartWhy would one company want to buy another company? 
: A company might want to buy another company if it is looking to expand its market share, 
product offerings, customer base and distribution channels. Through expanding in these ways, the 
company expects to increase its EPS and that the investm...
1. Why would one company want to buy another company? 
: One company will want to buy another company if it believes it will be better off after the 
acquisition takes place. For example: 
• The Seller's asking price is less than its Implied Value, i.e. the Present Value of its future cash flow...
Preview 2 out of 11 pages
Add to cart1. Why would one company want to buy another company? 
: One company will want to buy another company if it believes it will be better off after the 
acquisition takes place. For example: 
• The Seller's asking price is less than its Implied Value, i.e. the Present Value of its future cash flow...
3 Major Valuation Methodologies 
: Comparable Companies, Precedent Transactions, and Discounted Cash Flow Analysis 
Rank of 3 Major Methodologies from Highest to Lowest Expected Value 
: Nothing is ever definite, however, usually: 
-Precedent Transactions (because of Control Premium built into acqui...
Preview 2 out of 10 pages
Add to cart3 Major Valuation Methodologies 
: Comparable Companies, Precedent Transactions, and Discounted Cash Flow Analysis 
Rank of 3 Major Methodologies from Highest to Lowest Expected Value 
: Nothing is ever definite, however, usually: 
-Precedent Transactions (because of Control Premium built into acqui...
1. Why would a company want to acquire 
another company? 
: A company would acquire another company if it believes it will earn a good return on its 
investment - either in the form of a literal ROI, or in terms of a higher Earnings Per Share (EPS) 
number, which appeals to shareholders. 
There a...
Preview 2 out of 10 pages
Add to cart1. Why would a company want to acquire 
another company? 
: A company would acquire another company if it believes it will earn a good return on its 
investment - either in the form of a literal ROI, or in terms of a higher Earnings Per Share (EPS) 
number, which appeals to shareholders. 
There a...
What is the correct formula for Goodwill? 
A. Market value of acquirer - net identifiable assets of target 
B. Price paid - fair market value of net identifiable assets of target 
C. Market value of acquirer - fair market value of target 
D. Book value of target's equity + Adjustments 
: B. Price p...
Preview 3 out of 16 pages
Add to cartWhat is the correct formula for Goodwill? 
A. Market value of acquirer - net identifiable assets of target 
B. Price paid - fair market value of net identifiable assets of target 
C. Market value of acquirer - fair market value of target 
D. Book value of target's equity + Adjustments 
: B. Price p...
Why would a company want to acquire another company? 
: A company would acquire another company if it believes it will earn a good return on its 
investment - either in the form of a literal ROI< or in terms of higher EPS number appealing to its 
shareholders 
- Buyer wants to gain market share...
Preview 3 out of 22 pages
Add to cartWhy would a company want to acquire another company? 
: A company would acquire another company if it believes it will earn a good return on its 
investment - either in the form of a literal ROI< or in terms of higher EPS number appealing to its 
shareholders 
- Buyer wants to gain market share...
Walk me through a basic merger model 
: "A merger model is used to analyze the financial profiles of 2 companies, the purchase price 
and how the purchase is made, and determines whether the buyer's EPS increases or decreases. 
Step 1 is making assumptions about the acquisition - the price and wh...
Preview 3 out of 24 pages
Add to cartWalk me through a basic merger model 
: "A merger model is used to analyze the financial profiles of 2 companies, the purchase price 
and how the purchase is made, and determines whether the buyer's EPS increases or decreases. 
Step 1 is making assumptions about the acquisition - the price and wh...
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