Finance

Answer questions

1-Name three industries in which mergers have been prominent.
2 -What is the difference between a merger and a consolidation?
3-Why might the portfolio effect of a merger provide a higher valuation for the participating firms?
4- What is the difference between horizontal integration and vertical integration? How does antitrust policy affect the nature of mergers?
5-What is synergy? What might cause this result? Is there a tendency for management to over- or underestimate the potential synergistic benefits of a merger?
6- If a firm wishes to achieve immediate appreciation in earnings per share as a result of a merger, how can this be best accomplished in terms of exchange variables? What is a possible drawback to this approach in terms of long-range considerations?
7- It is possible for the postmerger P/E ratio to move in a direction opposite to that of the immediate postmerger earnings per share. Explain why this could happen.
8-How is goodwill now treated in a merger?
9- Suggest some ways in which firms have tried to avoid being part of a target takeover.
10 – What is a typical merger premium paid in a merger or acquisition? What effect does this premium have on the market value of the merger candidate, and when is most of this movement likely to take place?