You can pay in 6 instalment of
Rs 125-125 if u have any doubt.
computeroperator4@gmail.com
www.smuassignment.in
www.assignmenthelpforall.blogspot.in
DRIVE-SPRING 2014
PROGRAM-MBADS (SEM
3/SEM 5) MBAFLEX/ MBAN2 (SEM 3)
PGDFMN (SEM 1)-SUBJECT
CODE & NAME-MF0011 & MERGERS AND ACQUISITIONS
BK ID-B1732
CREDIT & MARKS-4
Credits, 60 marks
Q1. Elaborate on
the basic steps in organizing a merger and explain on the five stage model of
mergers and acquisitions.
(Explanation of basic
steps in organizing a merger, Explanation of five stage model of mergers and
acquisitions) 5, 5
Answer.
Basic steps in
organizing a merger
Mergers and acquisitions are
normally decided after thorough examination of all facts and aspects. Like
capital budgeting decisions, these are difficult to reverse once they are put
through, and so the organisation has to be meticulous.
Q2. Synergy is the
additional value that is generated by the combination of two or more than two
firms creating opportunities. Explain the role of industry life cycle and pre
requisites for creation of synergy
(Explanation of the
role of industry life cycle, Explanation of prerequisites for creation of
synergy)5,5
Answer.
Role of industry
life cycle
Industry lifecycle has a crucial impact
on mergers and acquisitions. The different stages of industry lifecycle are:
Fragmentation Stage: The first stage of the new
industry is referred to as fragmentation. In this stage, the new industry
develops the business. The entrepreneur plans on how to introduce new products
or services into the market. The twin problems of innovation and invention are
overcome by the entrepreneur at this stage.
Q3. Corporate
restructuring is a broad based business initiative that results in major change
of size, ownership, control and/or management. Write down the characteristics
of corporate restructuring and explain the types of corporate restructuring.
(Explanation of
characteristics of corporate restructuring, Explanation of types of corporate
restructuring) 5,5
Answer.
Characteristics
of corporate restructuring
The key characteristics of
corporate restructuring are:
·
Selling
or closing of unprofitable divisions from its core business, thereby achieving
staff reduction and a stronger balance sheet.
·
Revamping
of corporate management.
·
Sale
of underutilised assets such as patents/brands.
·
Outsourcing
of operations like payroll and technical support to a more efficient third
party.
·
Moving
of operations like manufacturing to lower-cost locations.
Q4. Leveraged Buyouts
(LBO) is a financing technique of purchasing a private company with the help of
borrowed or debt capital. Explain the modes of LBO financing and governance
aspects of LBOs.
(Explanation of
modes of LBOs, Governance aspects of LBOs)5,5
Answer.
Modes of LBOs
There are many types of financing
used in an LBO. These include the following (in order of their risk):
1. Senior debt: The debt
that is at the topmost rank amongst all the other debts and equity capital in
the business is the senior debt. A typical structure of a bank loan is up to
three trenches: ‘A’, ‘B’ and ‘C’. Specific assets of the company generally
secure the debt, which implies that if there is a breach in the obligations
under the loan agreement, the lender automatically takes over the assets;
therefore the cost of debt is lower. Usually the
Q5. Joint Ventures
(JV) have become an important strategic option for many businesses. Give the
meaning of JV with example. Explain the characteristics of Joint Ventures. Also
explain the Rationale for Joint Ventures and alternatives to JV’s as expansion
strategy options with example.
(Meaning of JV with
example, Characteristics of JV, Explanation of rationale for JVs, Explanation
of alternatives to JVs as expansion strategy options with example)2,2,3,6
Answer.
Meaning of JV
with example
The term ‘JV’ is an umbrella term
which describes the commercial arrangement between two or more economically
independent entities. In practice, the legal form of a JV is likely to be
determined by a number of factors including the nature and size of enterprise,
the anticipated length of the venture, the identity and location of the
partners and their commercial and financial objectives.
Q6. Amalgamation is
the nature of merger is an amalgamation/consolidation which satisfies/ meets
the following conditions. Explain the two methods of amalgamation. Explain the
treatment of Goodwill arising on Amalgamation and treatment of reserves of
amalgamation.
(Explanation of two
methods of amalgamation, Explanation of treatment of goodwill arising in
amalgamation, Explanation of treatment of reserves of amalgamation)5,2,3
Answer.
Methods of
amalgamation
As per AS 14, there are two
method of accounting for amalgamations:
(a) The Pooling of Interest
Method (applicable in case of amalgamation in the nature of merger) and
(b) The Purchase Method
(applicable in case of amalgamation in the nature of purchase).
No comments:
Post a Comment