T O P I C : A s s e t V a l u a t i o n M o d e l s f o r M e r g e r s a n d A c q u i s i t i o n s W h a t i s t h e r a t i o o f e x c h a n g e ? I s i t b a s e d o n t h e c u r r e n t m a r k e t p r i c e s o f t h e s h a r e s o f t h e a c q u i r i n g a n d t a r g e t f i r m s ?
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T O P I C : A s s e t V a l u a t i o n M o d e l s f o r M e r g e r s a n d A c q u i s i t i o n s
- W h a t i s t h e r a t i o o f e x c h a n g e ?
- I s i t b a s e d o n t h e c u r r e n t m a r k e t p r i c e s o f t h e s h a r e s o f t h e a c q u i r i n g a n d t a r g e t f i r m s ?
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- T o p i c : B u s i n e s s V a l u a t i o n a n d C o r p o r a t e R e s t r u c t u r i n g D e f i n e a n d d i f f e r e n t i a t e a m o n g t h e m e m b e r s o f e a c h o f t h e f o l l o w i n g s e t s o f t e r m s : m e r g e r s , c o n s o l i d a t i o n s , a n d h o l d i n g c o m p a n i e s; a c q u i r i n g c o m p a n y a n d t a r g e t c o m p a n y ; f r i e n d l y m e r g e r a n d h o s t i l e m e r g e r ; a n d s t r a t e g i c m e r g e r a n d f i n a n c i a l m e r g e r .A n s w e r t h e f o l l o w i n g , y o u m a y f i n d t h e a n s w e r s i n a n y w e b s i t e a n d a l s o p u t a r e f e r e n c e T o p i c : T A X R E M E D I E S A s s e s s m e n t o f i n t e r n a l r e v e n u e t a x e s R e m e d i e s o f t h e t a x p a y e r G o v e r n m e n t r e m e d i e s f o r c o l l e c t i o n o f d e l i n q u e n t t a x e s C i v i l p e n a l t i e s N o t e : A n s w e r s h o u l d b e q u i t e l o n g f o r m e t o u n d e r s t a n d m o r eA n s w e r t h e f o l l o w i n g , y o u m a y f i n d t h e a n s w e r s i n a n y w e b s i t e a n d a l s o p u t a r e f e r e n c e T o p i c : F r i n g e B e n e f i t s T a x C o m p o n e n t s o f N o n - T a x a b l e F r i n g e B e n e f i t s C o m p o n e n t s o f D e - m i n i m i s B e n e f i t s C o m p o n e n t s o f U n s p e c i f i e d T a x a b l e f r i n g e b e n e f i t s N o t e : A n s w e r s h o u l d b e q u i t e l o n g f o r m e t o u n d e r s t a n d m o r e
- A s s e t V a l u a t i o n M o d e l s f o r M e r g e r s a n d A c q u i s i t i o n s W h y m a y a l o n g - r u n v i e w o f t h e m e r g e d f i r m ’ s e a r n i n g s p e r s h a r e c h a n g e a m e r g e r d e c i s i o n ? W h a t r o l e d o i n v e s t m e n t b a n k e r s o f t e n p l a y i n t h e m e r g e r n e g o t i a t i o n p r o c e s s ? C a p i t a l S t r u c t u r e : B o n d V a l u a t i o n W h a t b a s i c p r o c e d u r e i s u s e d t o v a l u e a b o n d t h a t p a y s a n n u a l i n t e r e s t ? S e m i a n n u a l i n t e r e s t ?C a p i t a l S t r u c t u r e : B o n d V a l u a t i o n W h a t r e l a t i o n s h i p b e t w e e n t h e r e q u i r e d r e t u r n a n d t h e c o u p o n i n t e r e s t r a t e w i l l c a u s e a b o n d t o s e l l a t a d i s c o u n t ? A t a p r e m i u m ? A t i t s p a r v a l u e ? I f t h e r e q u i r e d r e t u r n o n a b o n d d i f f e r s f r o m i t s c o u p o n i n t e r e s t r a t e , d e s c r i b e t h e b e h a v i o r o f t h e b o n d v a l u e o v e r t i m e a s t h e b o n d m o v e s t o w a r d m a t u r i t y A s a r i s k - a v e r s e i n v e s t o r , w o u l d y o u p r e f e r b o n d s w i t h s h o r t o r l o n g p e r i o d s u n t i l m a t u r i t y ? W h y ?C a p i t a l S t r u c t u r e : S t o c k V a l u a t i o n D e s c r i b e t h e e v e n t s t h a t o c c u r i n a n e f f i c i e n t m a r k e t i n r e s p o n s e t o n e w i n f o r m a t i o n t h a t c a u s e s t h e e x p e c t e d r e t u r n t o e x c e e d t h e r e q u i r e d r e t u r n . W h a t h a p p e n s t o t h e m a r k e t v a l u e ? W h a t d o e s t h e e f f i c i e n t - m a r k e t h y p o t h e s i s ( E M H ) s a y a b o u t ( a ) s e c u r i t i e s p r i c e s , ( b ) t h e i r r e a c t i o n t o n e w i n f o r m a t i o n , a n d ( c ) i n v e s t o r o p p o r t u n i t i e s t o p r o f i t ? W h a t i s t h e b e h a v i o r a l f i n a n c e c h a l l e n g e t o t h i s h y p o t h es i s ? D e s c r i b e t h e f r e e c a s h f l o w v a l u a t i o n m o d e l a n d e x p l a i n h o w i t d…
- T o p i c : F i n a n c i a l A n a l y s i s G i v e t h r e e p o s s i b l e c a u s e s o f t h e f o l l o w i n g : A d v e r s e d i r e c t m a t e r i a l s p r i c e v a r i a n c e. F a v o r a b l e d i r e c t l a b o r r a t e v a r i a n c e . F a v o r a b l e d i r e c t m a t e r i a l s u s a g e v a r i a n c e. A d v e r s e d i r e c t l a b o r e f f i c i e n c y v a r i a n c e. A n d e x p l a i n ho w y o u w o u l d i d e n t i f y w h i c h v a ri a n c e s t o i n v e s t i g a t e N o t e : A n s w e r s s h o u l d b e q u i t e l o n g f o r m e t o u n d e r t a n d m o r e .M A N A G I N G Y O U R C A S H A N D S A V I N G S Y o u ’ r e g e t t I n g m a r r i e d a n d a r e u n h a p p y w i t h y o u r p r e s e n t b a n k . D i s c u s s y o u r s t r a t e g y f o r c h o o s i n g a n e w b a n k a n d o p e n i n g a n a c c o u n t . C o n s i d e r t h e f a c t o r s t h a t a r e i m p o r t a n t t o y o u i n s e l e c t i n g a b a n k – s u c h a s t h e t y p e a n d o w n e r s h i p o f n e w a c c o u n t s a n d b a n k f e e s a n d c h a r g e s .C a p i t a l S t r u c t u r e : S t o c k V a l u a t i o n D e s c r i b e , c o m p a r e , a n d c o n t r a s t t h e f o l l o w i n g c o m m o n s t o c k d i v i d e n d v a l u a t i o n m o d e l s : z e r o - g r o w t h, c o n s t a n t - g r o w t h , a n d v a r i a b l e - g r o w t h E x p l a i n e a c h o f t h e t h r e e o t h e r a p p r o a c h e s t o c o m m o n s t o c k v a l u a t i o n : b o o k v a l u e , l i q u i d a t i o n v a l u e , a n d p r i c e / e a r n i n g s ( P / E ) m u l t i p l e s. W h i c h o f t h e s e i s c o n s i d e r e d t h e b e s t ?
- T o p i c : F i n a n c i n g O p e r a t i o n s a n d E x p a n s i o n W h a t i s t h e c o s t o f c a p i t a l ? W h a t a r e t h e n e t p r o c e e d s f r o m t h e s a l e o f a b o n d ? W h a t a r e f l o t a t i o n c o s t s , a n d h o w d o t h e y a f f e c t a b o n d ’ s n e t p r o c e e d s ? W h a t p r e m i s e a b o u t s h a r e v a l u e u n d e r l i e s t h e c o n s t a n t - g r o w t h v a l u a t i o n ( G o r d o n g r o w t h ) m o d e l t h a t i s u s e d t o m e a s u r e t h e c o s t o f c o m m o n s t o c k e q u i t y , r s ? H o w d o t h e c o n s t a n t - g r o w t h v a l u a t i o n m o d e l a n d c a p i t a l a s s e t p r i c i n g m o d e l m e t h o d s f o r f i n d i n g t h e c o s t o f c o m m o n s t o c k d i f f e r ? W h a t i s t h e w e i g…I n t r o d u c t i o n t o F i n a n c i a l M a r k e t s W h a t i s t h e m o n e y m a r k e t ? W h a t i s t h e E u r o c u r r e n c y m a r k e t ? W h a t i s t h e c a p i t a l m a r k e t ? W h a t a r e t h e p r i m a r y s e c u r i t i e s t r a d e d i n i t ? W h a t a r e e f f i c i e n t m a r k e t s ? W h a t d e t e r m i n e s t h e p r i c e o f a n i n d i v i d u a l s e c u r i t y i n s u c h a m a r k e t ?A n s w e r t h e f o l l o w i n g , y o u m a y f i n d t h e a n s w e r s i n a n y w e b s i t e a n d a l s o p u t a r e f e r e n c e T o p i c : S p e c i f i e d T a x a b le F r i n g e B e n e f i t s: H o u s i n g B e n e f i t s E x p e n s e A c c o u n t B e n e f i t s V e h i c l e B e n e f i t s H o u s e h o l d P e r s o n n e l E x p e n s e B e n e f i t s I n t e r e s t o n L o a n B e n e f i t s N o t e : A n s w e r s h o u l d b e q u i t e l o n g f o r m e t o u n d e r s t a n d m o r e
