Brealey. Myers. Allen Chapter 33 Test

Brealey. Myers. Allen Chapter 33 Test - Chapter 33...

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Brealey/Myers/Allen, Principles of Corporate Finance, 8/e 1 Chapter 33 Corporate Restructuring Multiple Choice Questions 1. The following are some of the ways by which changes in company structure are effected: (I) LBOs (II) Privatizations (III) Spin-offs and carve-outs (IV) Bankruptcies A) I and II only B) II only C) I and III only D) I, II, III, and IV Answer: D Type: Medium Page: 905 2. Leveraged buyouts (LBOs) almost always involve: (I) a large part of the purchase price is financed mostly by debt (II) most of the is below investment grade (junk) (III) the firm goes private and its shares are no longer traded on the open market A) I only B) II only C) III only D) I, II, and III Answer: D Type: Medium Page: 905 3. When a leveraged buyout transaction is led by the firm's management then the transaction is called: A) IPO B) MBO C) LBOM D) CFO Answer: B Type: Easy Page: 905 4. In 1988 LBOs were on average financed with 90% debt. In recent years the figure is: A) 80% B) 75% C) 60% D) 50% Answer: C Type: Medium Page: 905
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Test Bank, Chapter 33 2 5. The following are examples of LBOs except: A) America Online and Time Warner B) KKR and RJR Nabisco C) KKR and Beatrice D) Texas Pacific Group, Bain Capital, & Goldman Sachs and Burger King Answer: A Type: Easy Page: 906 6. The following are examples of LBOs except: A) KKR and Safeway B) KKR and PanAmSat C) Daimler-Benz and Chrysler D) All of the above are LBOs Answer: C Type: Easy Page: 906 7. The following are examples of LBOs that reverted to being public companies A) Northwest Airlines B) Safeway Stores C) Kaiser Aluminum D) all of the above Answer: D Type: Medium Page: 907 8. Big gainers from LBOs were: A) Junk bond holders B) Raiders C) Selling stockholders D) Investment banking firms Answer: C Type: Medium Page: 907 9. Junk bonds are bonds with: A) AAA or Aaa ratings B) BBB or Baa ratings C) BB or Ba ratings or lower D) D rated bonds Answer: C Type: Easy Page: 908 10. The main characteristics of LBOs are: A) High debt B) Private ownership C) Management incentives D) All of the above Answer: D Type: Medium Page: 908
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Brealey/Myers/Allen, Principles of Corporate Finance, 8/e 3 11. The gains from LBOs are from: A) Tax savings because of high debt servicing B) Loss in the value to bondholders C) Improved performance because of incentives to mangers and employees D) All of the above Answer: D Type: Medium Page: 908 12. The main characteristics of leveraged restructuring are: (I) High debt (II) Private ownership (III) Management incentives A) I only B) I and II only C) I and III only D) I, II, and III Answer: C Type: Medium Page: 909 13. The following are examples of spin-offs except: A) Abbot Laboratories and Hospira B) AT&T and Lucent C) General Motors and EDS D) Exxon and Mobil
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This note was uploaded on 04/18/2010 for the course FINANCE 936116531 taught by Professor Wuyiling during the Spring '10 term at Nashville State Community College.

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Brealey. Myers. Allen Chapter 33 Test - Chapter 33...

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