CHAPTER_32 - CHAPTER 32 Corporate Restructuring Answers to...

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CHAPTER 32 Corporate Restructuring Answers to Problem Sets 1. a. Purchase of a business using mostly debt financing. The company goes private. Management is given a substantial equity stake. b. An LBO undertaken by management. c. A parent company creates a new company with part of its assets and operations. Shares in the new business are distributed to the parent’s stockholders. d. Like a spin-off, but shares in the new business are sold to investors. e. Sale of specific assets rather than entire firm. f. A government-owned business is sold to private investors. g. A company moves to a much higher debt ratio. Proceeds of additional borrowing are paid out to stockholders. 2. a. True b. False c. True d. False e. True f. False g. False h. True 6. Because the fund has a limited life. Payoffs from the fund’s investment portfolio must be distributed to limited and general partners. 7. Chapter 7 usually leads to liquidation. Chapter 11 protects the firm from its creditors while a reorganization plan is developed. 8.
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This note was uploaded on 05/09/2011 for the course FNAN 522 taught by Professor Wilson during the Spring '11 term at University of Louisiana at Lafayette.

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CHAPTER_32 - CHAPTER 32 Corporate Restructuring Answers to...

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