Graduate Seminar in Corporate Restructuring
Pre-Test Questions
Course Introduction
This course offers an in-depth examination of corporate restructuring strategies, with a focus on legal, financial, and managerial considerations. Students will analyze cases involving mergers and acquisitions, divestitures, leveraged buyouts, bankruptcies, and distressed asset sales, exploring the motivations behind restructuring decisions and their impact on stakeholders. Through a combination of lectures, case studies, and guest speakers from the industry, participants will develop critical thinking skills for evaluating restructuring opportunities, understanding regulatory and ethical implications, and formulating effective corporate renewal strategies in dynamic business environments.
Recommended Textbook Mergers Acquisitions and Corporate Restructurings 6th Edition by Patrick A. Gaughan
Available Study Resources on Quizplus
16 Chapters
294 Verified Questions
294 Flashcards
Source URL: https://quizplus.com/study-set/3853 Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76843
Sample Questions
Q1) One of the advantages of an asset acquisition is that it may not be necessary to solicit approval from its own shareholders.
A)True
B)False
Answer: True
Q2) SPACs have not been popular since the 1990s.
A)True
B)False
Answer: False
Q3) In a de facto merger:
A)Bidders may be able to avoid all of the target's liabilities
B)Bidders own at least 30% of the target's stock
C)Only California law applies
D)The bidder is considered to have acquired the target even if no formal acquisition took place
True or False
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: History of Mergers
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76842
Sample Questions
Q1) Which of the following factors contributed to the end of the third merger wave?
A)Stock market downturn
B)Economic slowdown
C)Antitrust enforcement
D)None of the above
E)a, b, and c
Answer: E
Q2) Which of the following factors contributed to the end of the fifth merger wave?
A)Stock market downturn
B)Economic slowdown
C)Antitrust enforcement
D)None of the above
E)a, b, and c
F)Both a and b
Answer: F
Q3) The first merger wave was significantly curtailed by the Sherman Antitrust Act.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Legal Framework
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76841
Sample Questions
Q1) Bidders doing a mini-tender offer must file a Schedule TO within 20 business days from when the offer is announced.
A)True
B)False
Answer: False
Q2) In India, bidders who acquire what percent of a target's stock must disclose that holding within two days of attaining it?
A)5%
B)2%
C)10%
D)51%
E)Such disclosure is not required in India
Answer: A
Q3) The eight-factor test comes from what notable case?
A)Edgar v.Mite
B)CTS v.Dynamics
C)Wellman v.Dickinson
D)United States v.Microsoft
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Merger Strategy
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76840
Sample Questions
Q1) With respect to diversification programs, Berger and Ofek found:
A)Reduced Tobin q values
B)Evidence of higher premiums
C)No significant shareholder wealth effects
D)None of the above
Q2) The Merck-Medco deal is an example of related diversification.
A)True
B)False
Q3) Markides and Oyon found positive announcement effects for acquisitions by U.S.firms of:
A)Continental European targets
B)British or Canadian target firms
C)South and Central American firms
D)Asian companies
Q4) United Airlines was finally able to realize synergies when they acquired travel-related businesses such as hotels and car rental companies.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Antitakeover Measures
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76839
Sample Questions
Q1) The research of Bebchuk and Cohen found a negative relationship between firm value, as measured by Tobin's q, and the implementation of a staggered board.
A)True
B)False
Q2) Morck, Shleifer, and Vishny found that with higher share ownership by management there tends to be:
A)More antitakeover defense
B)Higher Tobin q's
C)Lower shareholder values
D)None of the above
Q3) Which of the following are usually considered active antitakeover measures?
A)Greenmail
B)Poison pills
C)Corporate charter amendments
D)All of the above
Q4) Research has shown that shareholders in companies that become white knights experience increased shareholder wealth.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Takeover Tactics
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76838
Sample Questions
Q1) Bris found that toe holds were used in what percent of the tender offers he examined?
A)30%
B)75%
C)15%
D)Nearly 100%
Q2) Bange and Mazzeo found that target companies whose CEO and chairman were the same person were more likely to be recipients of bypass offers.
A)True
B)False
Q3) Listokin found that dissidents' victories in proxy contests did what over his study period in the 2000s:
A)Increased over time
B)Decreased over time
C)No discernable pattern
D)None of the above
Q4) Toe holds are usually established in the vast majority of tender offers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Hedge Funds As Activist Investors
Available Study Resources on Quizplus for this Chatper
10 Verified Questions
10 Flashcards
Source URL: https://quizplus.com/quiz/76837
Sample Questions
Q1) Which of the following may be a valid criticism of activist hedge funds?
A)May cause target firms to be too short-term oriented
B)Tend to reduce target financial performance
C)Often fail to yield positive returns for investors
D)All of the above
E)None of the above
Q2) Activists acquire stock positions with intent to make changes in the company which will increase the stock price and give them a profit.
A)True
B)False
Q3) Research, such as the work of Clifford, has established that when activists establish share position in target shareholder wealth declines.
A)True
B)False
Q4) Research, such as the work of Huang, found that companies which had activists in their shareholder base tended to receive higher takeover premiums when they are sold.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Going-Private Transactions and Leveraged Buyouts
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76836
Sample Questions
Q1) Harris, Siegel, and Wright found productivity improvements for European companies that underwent an MBO.
A)True
B)False
Q2) Which of the following firms were or are considered "LBO firms"?
A)KKR
B)Forstmann Little
C)Blackstone Group
D)All of the above
E)None of the above
Q3) Which of the following is true of senior debt?
A)The rate on senior debt is 2% to 3% above prime
B)Senior debt is usually about a quarter to a third of total LBO debt
C)The term is usually 5 to 10 years
D)All of the above
Q4) Private equity firm is a more modern name for LBO firms.
A)True
B)False
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: The Private Equity Market
Available Study Resources on Quizplus for this Chatper
11 Verified Questions
11 Flashcards
Source URL: https://quizplus.com/quiz/76835
Sample Questions
Q1) Which of the following is a way that private equity firms can extract money from the targets they take over:
A)LBOs
B)Dividend recapitalizations
C)Additional acquisitions
D)All of the above
E)None of the above
Q2) Private equity firms used to be referred to as LBO firms.
A)True
B)False
Q3) Phalippou and Gottschalg analyzed the same return data as Kaplan and Schoar but found that private equity returns trailed the S&P 500 when unexited deals were taken into account.
A)True
B)False
Q4) Officer et al.found that target companies received higher takeover premiums in club deals.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: The Junk Bond and the Leveraged Loan Market and
Stapled Financing
Available Study Resources on Quizplus for this Chatper
13 Verified Questions
13 Flashcards
Source URL: https://quizplus.com/quiz/76834
Sample Questions
Q1) The original issue high-yield bond market got its start in the late 1970s.
A)True
B)False
Q2) Ma, Rao, and Peterson showed that the junk bond market was so resilient in the mid-1980s that the bankruptcy of LTV had little impact of bond default probabilities.
A)True
B)False
Q3) Altman and Namacher found the following historical average default rates applied to high-yield bonds: j.
A)5% k.
B)2% l.
C)10% m.
D)none of these
Q4) The collapse of the junk bond market mainly ended the use of original issue high-yield bonds in the decades that followed.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Corporate Restructuring
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76833
Sample Questions
Q1) Sell-offs of their parts supplier units enabled GM and Ford to successfully use sell-offs to avoid union compensated-related liabilities of those units.
A)True
B)False
Q2) First Data shareholders were able to realize increased value when Western Union was spun off.
A)True
B)False
Q3) Which of the following studies showed positive shareholder wealth effects for sell-offs?
A)Cusatis, Miles, and Wooldridge
B)JP Morgan
C)Kudla and McInish
D)All of the above
E)Both a and c
Q4) Boise Cascade abandoned its core business and focused on the business of Office Max, which it had previously acquired.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Restructuring in Bankruptcy
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76832
Sample Questions
Q1) George and Hwang found that firms with high distress costs had:
A)Lower leverage
B)Lower probabilities of default
C)None of the above
D)Both a and b
Q2) Tashjian, Lease, and McConnell found that pre-voted prepacks:
A)Spend less time in bankruptcy court
B)Devote more time to pre ling negotiations
C)Have lower direct costs as a fraction of assets
D)Have higher recovery rates
E)All of the above
F)Both a and c
Q3) In Chapter 11, when an automatic stay has been granted creditors cannot seize the assets of bankrupt companies without getting court approval.
A)True
B)False
Q4) A reorganization plan in Chapter 11 is part of a larger document called a disclosure statement.
A)True
B)False
Page 14
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Corporate Governance
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76831
Sample Questions
Q1) With respect to companies with golden parachute agreements, Machlin, Choe, and Miles found:
A)The number of multiple takeover offers was signi cantly greater for rms that possessed golden parachute agreements than for those rms without such agreements
B)A positive relationship between the size of the golden parachute agreement and the magnitude of the takeover premium
C)Negative shareholder wealth effects after the adoptions of such agreements
D)All of the above
E)Both a and b
F)Both b and c
Q2) Cooper, Gulen, and Rau found that firms in the highest decile ranking of executive compensation earned significant negative excess returns.
A)True
B)False
Q3) Stock options are one method which may be used to align management and shareholder's interests.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Joint Ventures and Strategic Alliances
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76830
Sample Questions
Q1) The following can be a reason why joint ventures may not succeed:
A)Disagreement among participants
B)Distrust among the participants
C)Payment of too high a takeover premium
D)All of the above
E)Both a and b
Q2) Research by Marciukaityte, Roskelley, and Wang found:
A)Positive announcement effects to the formation of alliances in the financial services industry
B)Alliances in the financial services industry showed improvements in operating performance relative to the industry
C)Alliance partners were more likely to enter into joint ventures or M&A with each other than randomly selected firms
D)All of the above
Q3) The following are motives for joint ventures except for:
A)Enhance research and development capabilities
B)Gain access to key supplies
C)Enhance distribution systems
D)Enhance market share
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Valuation
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76829
Sample Questions
Q1) In thin markets float shares are not as plentiful.
A)True
B)False
Q2) Research by Roach showed:
A)Merger premiums have risen over time
B)Strategic mergers provide more synergistic benefits
C)Strategic focus is not a determinant of merger premiums.
D)All of these
E)Both a and b
Q3) Acquiring firm shareholders tend to earn zero or negative returns from mergers.
A)True
B)False
Q4) Research by Kaplan and Ruback found that:
A)Median estimates of the DCF were within 10% of the market values
B)Comparable multiples yielded significantly higher values than DCF measures
C)Comparable multiples yielded significantly lower values than DCF measures
D)None of these
Q5) In bear markets, control premiums (relative to current market prices)) may rise.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Tax Issues in Mergers & Acquisitions
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/76828
Sample Questions
Q1) Research by Scholes and Wolfson on M&As before 1981, between 1981 and 1986, and after 1986 found:
A)No differences in M&A activity over the 1981-1986 period compared the pre-1981
B)Intensified level of merger activity to tax motives that were put in place with the 1981 Act and eliminated by the 1986 Act
C)No clear trends in the data
D)None of the above
Q2) In a Type C reorganization, cash may be used only if 50% of the target shares were purchased with stock.
A)True B)False
Q3) Research seeking to find the existence of asset basis step-up as a motivating factor for mergers and acquisitions before the Tax Reform Act of 1986, such as research by Auerbach and Reishus, confirmed that asset basis step-up was a significant motivating factor.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above.