Ch 14 · Mergers, Acquisitions & Corporate Restructuring — CA Final AFM
5 levels · 63 questions · free
How to play
Mixed questions from this chapter — fill the missing term, sort into the right box, match the pairs, order the steps, or catch the formula that is wrong.
What this drills
Nine takeover defences and five takeover strategies, each with a name an examiner can ask for cold — plus the swap ratio, which inverts the moment the factor is a negative one.
- ✓Types of merger and sources of synergy
- ✓Swap ratio and post-merger EPS
- ✓Takeover strategies and antitakeover defences
- ✓Demerger, divestiture, MBO and LBO
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CA Final books →Ch 14 · Mergers, Acquisitions & Corporate Restructuring — questions
When does the swap ratio invert?+
For NEGATIVE factors. On positive factors such as EPS, market price or book value it is Target ÷ Acquirer. On negative factors such as gross NPAs or accumulated losses it becomes Acquirer ÷ Target.
What is a reverse bid?+
When the SMALLER company gains control of the larger one. The acquired company counts as big if its assets exceed the acquirer's, or the equity to be issued exceeds the acquirer's original issued capital, or control changes through a minority holder group.