Winter / November 2011

Master of Business Administration Semester III MF0011 – Mergers & Acquisitions - 4 Credits (Book ID: B1209) Assignment Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Explain the types of mergers. Q2. Firm X is having value of Rs 400 lakh and value of the firm Y is 150 lakh. If the two firms combine, the estimated cost savings would have present value of Rs 60 lakh. Firm X will have to make payments equal to Rs 170 lakh while making the acquisition. What will be the value of Synergy, Costs and Net Gain from the Merger? Hint: Value of Synergy=60 lakhs , cost = 20 Lakhs , Net gain = 40 lakhs

Q3. Merger should be a capital budgeting decision. Explain. Q4. Explain international joint ventures. What are reasons of joint venture failure? Q5. The following is the balance sheet of XYZ Ltd:
Liabilities Share Capital: 6000 Equity Shares of Rs. 100 each, fully paid General Reserve Profit & Loss Appropriation A/c Bills Payable Sundry Creditors Preliminary Expsenses Rs. 6,00,000 2,50,000 80,000 70,000 2,45,000 20,000 12,45,000 Assets Goodwill Plant and Machinery Furniture and Fittings Stock Debtors Cash at Bank Rs. 70,000 4,60,000 1,02,000 4,36,000 1,34,000 23,000 12,45,000

If (i) ABC Ltd. purchases the business of XYZ Ltd. (ii) Goodwill is valued at Rs. 2,00,000 while stock is valued at Rs. 4,16,000. Other assets are considered worth their book values. (iii) ABC Ltd. does not take over Cash at Bank (iv) Consideration is to be discharged in the form of 90,000 fully paid equity shares of Rs. 10 each, valued at par and the balance in cash. Calculate the consideration. Hint : Consideration= 900000 and cash balance 97000= total 997000.

4 Credits (Book ID: B1209) Assignment Set. Answer all the questions. What are the key factors contributing to M&A activities? .2 (60 Marks) Note: Each Question carries 10 marks.Winter / November 2011 Q6. What are the steps for successful mergers? Q2. Explain the key regulatory provisions of M&A under: (a) (b) FEMA. 1999 Listing Agreement Master of Business Administration Semester III MF0011 – Mergers & Acquisitions . Q1.

Explain the key guidelines of takeovers. cultural and HRM issues in M&A. . What are the different methods of business valuation? Q5.Winter / November 2011 Q3. Q6. . Explain the political. Explain the following (a) (b) (c) (d) Spin-off Sell-off Equity carve out ESOP Q4.

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