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WorksheetsChapter 7 Quiz
Total questions: 15
Worksheet time: 5mins
A process of validating the representations made by a seller, normally to an investor
Merger
Due Diligence
Acquisition
Other Valuation Technique
The target's value is calculated based on the projected future cash flows with appropriate discount rate
Discounted Cash Flow
Comparable Company Analysis
Economic Value Added
Comparable transaction analysis
When two companies merged coming from different stages of production or value chain
Vertical Merger
Horizontal Merger
Conglomerate Merger
Diagonal Merger
The parent company offers shareholders the option to keep their current shares or exchange them for shares of the divesting company
Split off
Equity carve out
Divestiture
Spin off
This is concerned with the legal and financials of the company under evaluation. So essentially, this is quantitative, which measurement can be normally done by use of mathematical calculation.
Soft Due Diligence
Combined Due Diligence
Hard Due Diligence
Semi-Hard Due Diligence
Serves as the best document to support the financial performance and financial position of the company including their cash flows.
Market Capitalization
Financial Statement
Stock Price History
Market Expectations
It tends to fluctuate a lot due to evolving market conditions which make it extremely subjective.
Income-based valuation
Dividend paying capacity method
Return on investment based valuation
Divestiture
A corporate strategy that allows company to combine its assets to another company or to acquire another company
Mergers and Acquisitions
Consolidation
Perfect Combination
Due diligence
When parent purchases more interest from its subsidiary
Subsidiary M&As
Statutory M&As
Short-form M&As
Basic M&As
The following are the top reasons why companies entered M & A's except:
Manage the Cost Capital
Economics of Scale
Expansion and Growth
Technological advancement
The due diligence team is composed of
Librarian, Teachers and Electricians
Lawyers, Auditors, and Technical experts
Doctors, Nurses, and Scientist
Musicians, Actors, and Pianists
To be tax free in the future spin off you should not offer more than ______ percent of the stocks to IPO during carve out.
80%
20%
30%
70%
The partial divestiture of a business unit in which a parent company sells a minority interest of a subsidiary to outside investors.
Spin off
Split off
Partial sell off
Equity carve out
With that law, securities dealers and brokers became responsible for fully disclosing material information about instruments they were selling.
Securities Act of 1933
Securities Act of 1900
Securities Act of 2000
Sarbanes-Oxley Act
It is the action or process of selling off subsidiary business interest or investments
Due diligence
Divestiture
Mergers and acquisitions
ROI based valuation
