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Master of Business Administration - MBA Semester 3

FIN302 – Mergers and Acquisitions

Set – 1

Q1. Explain the basis for arriving at Fair Price.

• Explanation for the basis for arriving at Fair Price. 10

Answer. Basis for arriving at fair price

All-India level financial institutions and banks follow the following criteria for calculating the fair value.

1. Past

Q2. List the goals of Merger. Explain the selection criteria

a) Goals of Merger 5

b) Explanation of the selection criteria 5

Answer. Goals of Merger

The key principle behind M&A is that two companies together are more valuable than two separate
companies at

Q3. Explain financial restructures and Organizational restructuring. Explain their needs.

1) Financial restructuring and Organization restructuring 6

2) The need of financial restructuring and Organization restructuring 4

Answer. Financial restructuring

Reorganizing a company’s financial assets and liabilities so that the most favorable financial environment is
created is called financial restructuring.

The process of financial
Set - 2

Q1. List and explain the various modes of Leveraged Buyouts (LBO) financing

• Modes of LBO financing 10

Answer. Modes of LBO Financing

A leveraged buyout (LBO) refers to the acquisition of the whole or segment of a company that is funded
using a significant amount of debt. The assets of the company being acquired and those of the acquiring
company are used as collateral for the loan. The buyer may decide to invest a small amount of equity and
fund

Q2. Distinguish between Friendly and Hostile Takeover. Explain Reverse Takeover

a) Friendly and Hostile Takeover 5

b) Explanation of Reverse Takeover 5

Answer. Friendly and Hostile Takeovers

Friendly takeover: Before a bidder makes an offer for another company, he usually first informs the
company's

Q3. The financial analysis required in the case of a merger is the valuation of assets or stocks of the
target company in which the acquirer contemplates to invest. Explain the basis of Valuation

• Explanation of the several basis of valuation 10

Answer. Basis of Valuation

The financial analysis required in the case of a merger is the valuation of assets or stocks of the target
company in which the acquirer contemplates ato invest. Basis of Valuation. Basis of Value. A statement of
fundamental measurement principles of a valuation on a specified date. The

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