FIN 561 Midterm

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FIN 561 Midterm

1. (TCO A) Compare and contrast a merger with a tender offer. (15 points for merger and 15 points for tender offer; total 30 points)
2. (TCO B) List one benefit of trading halts for publicly listed companies as a way of managing information made available to the public, and list two disadvantages of trading halts. (10 points for each answer; total 30 points)
3. TCO C) Fair value determination of goodwill and calculating the premium paid over market value in a merger:
4. (TCO C) How does goodwill (under FASB 141 R) impact cash flows of the combined entity? (10 points) How do the 1993 tax law changes impact goodwill and the after tax cash flows of the combined entity after the M & A? (10 points)
5. (TCO J) List any three of the reasons why the firm would continue to exist beyond the point where its products have become obsolete. (10 points for each reason; total 30 points)
6. (TCO J) List any three of the reasons why the firm would continue to exist beyond the point where its products have become obsolete. (10 points for each reason; total 30 points)
7. (TCO D) Why did M & A activity decrease in the late 1980s and early 1990s? (10 points) Why did M & A activity increase again in the latter part of the 1990s? (10 points)