Question 1

The use of stock as a meaningful portion of a transaction generally leads to a:

Accepted Answer

A)  Higher valuation
B)  Lower valuation
C)  Higher multiple
D)  It depends

Question 2

Calculate the offer price per share for a company in an all-cash transaction given the following information.

Transaction Details:
Cash offer price: $300.00mm
Shares outstanding: 5.00mm
Current share price $30.00

Accepted Answer

A)  $60.00
B)  $10.00
C)  $6.00
D)  $30.00

Question 3

What is NOT a reason why transaction comps generally provide a higher multiple range than trading comps?

Accepted Answer

A)  Buyers pay control premiums
B)  Buyers often have the opportunity to realize synergies
C)  Buyers receive the right to control decisions
D)  Transaction comps are more accurate than trading comps

Question 4

Calculate the equity value in a fixed exchange ratio structure given the following information.

Transaction Details:
TargetCo's shareholders will receive one share of AcquirerCo's common stock for every four shares of TargetCo's common stock.AcquirerCo's share price prior to the announcement was $20.00.TargetCo has 25 million shares outstanding.

Accepted Answer

A)  $125.0mm
B)  $100.0mm
C)  $80.0mm
D)  $50.0mm

Question 5

Which structure generally gives greater certainty to the target's shareholders in terms of value received?

Accepted Answer

A)  Floating exchange ratio
B)  Fixed exchange ratio
C)  They both are the same
D)  It depends on the terms

Question 6

What is the correct order for a precedent transaction analysis?
E.Select the universe of comparable acquisitions
F.Benchmark the comparable acquisitions
G.Locate the necessary deal-related and financial information
H.Spread key statistics, ratios, and transaction multiples
I.Determine valuation

Accepted Answer

A)  E, H, F, G, I
B)  E, G, H, F, I
C)  I, H, G, E, F
D)  F, G, H, I, E

Question 7

Calculate the percentage of premium paid given the following details.

Details:
AcquirerCo officially announced today that it has agreed to buy TargetCo for $35 a share.TargetCo shares closed yesterday at $20.00.

Accepted Answer

A)  75%
B)  175%
C)  42%
D)  35%

Question 8

Determine the type of exchange ratio in the following Stock-for-Stock transaction.

Transaction Details:
AcquirerCo will acquire TargetCo for stock.TargetCo stockholders will receive $40.00 of AcquirerCo's common stock for each share of TargetCo common stock they hold.

Accepted Answer

A)  Fixed exchange ratio
B)  Secure exchange ratio
C)  Floating exchange ratio
D)  Linear exchange ratio

Exam 2: Precedent Transactions Analysis

Calculate the percentage of premium paid given the following details. Details: AcquirerCo officially announced today that it has agreed to buy TargetCo for $35 a share.TargetCo shares closed yesterday at $20.00.

Correct Answer
verified

Correct Answer
verified

Calculate the offer price per share for a company in an all-cash transaction given the following information. Transaction Details: Cash offer price: $300.00mm Shares outstanding: 5.00mm Current share price $30.00

Correct Answer
verified

Which structure generally gives greater certainty to the target's shareholders in terms of value received?

Correct Answer
verified

What is NOT a reason why transaction comps generally provide a higher multiple range than trading comps?

Correct Answer
verified

What is the correct order for a precedent transaction analysis? E.Select the universe of comparable acquisitions F.Benchmark the comparable acquisitions G.Locate the necessary deal-related and financial information H.Spread key statistics, ratios, and transaction multiples I.Determine valuation

Correct Answer
verified

Determine the type of exchange ratio in the following Stock-for-Stock transaction. Transaction Details: AcquirerCo will acquire TargetCo for stock.TargetCo stockholders will receive $40.00 of AcquirerCo's common stock for each share of TargetCo common stock they hold.

Correct Answer
verified

The use of stock as a meaningful portion of a transaction generally leads to a:

Correct Answer
verified

Exam 2: Precedent Transactions Analysis

Calculate the percentage of premium paid given the following details. Details: AcquirerCo officially announced today that it has agreed to buy TargetCo for $35 a share.TargetCo shares closed yesterday at $20.00.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Calculate the offer price per share for a company in an all-cash transaction given the following information. Transaction Details: Cash offer price: $300.00mm Shares outstanding: 5.00mm Current share price $30.00

Correct AnswerverifiedShow Answer

Which structure generally gives greater certainty to the target's shareholders in terms of value received?

Correct AnswerverifiedShow Answer

What is NOT a reason why transaction comps generally provide a higher multiple range than trading comps?

Correct AnswerverifiedShow Answer

What is the correct order for a precedent transaction analysis? E.Select the universe of comparable acquisitions F.Benchmark the comparable acquisitions G.Locate the necessary deal-related and financial information H.Spread key statistics, ratios, and transaction multiples I.Determine valuation

Correct AnswerverifiedShow Answer

Determine the type of exchange ratio in the following Stock-for-Stock transaction. Transaction Details: AcquirerCo will acquire TargetCo for stock.TargetCo stockholders will receive $40.00 of AcquirerCo's common stock for each share of TargetCo common stock they hold.

Correct AnswerverifiedShow Answer

The use of stock as a meaningful portion of a transaction generally leads to a:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified