Sample_Test_Question_Chapter_32

Sample_Test_Question_Chapter_32 - III) Transfer business...

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1 Sample test questions for Chapter 32 1. Conglomerate discount means: I) The market value of the whole conglomerate is greater than the sum of the value of the parts II) The market value of the whole conglomerate is less than the sum of the value of the parts III) The book value of the whole conglomerate is greater than the sum of the value of the parts IV) The book value of the whole conglomerate is less than the sum of the value of the parts A. I only B. II only C. III only D. IV only 2. Private-equity partnerships can cash out in the following ways: I) by an IPO of portfolio companies. II) a trade sale to another firm. III) limited partner financing. A. I only B. II only C. I and II only D. III only 3. Asset sales are: I) Good news for investors in the selling firm II) On average the assets are employed more productively after the sale
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Unformatted text preview: III) Transfer business units to the companies that can manage them more efficiently A. I only B. I and II only C. I, II, and III D. III only 4. Which of the following statements regarding spin-offs and carve-outs is not true? A. Spin-offs are not taxed if the shareholders of the parent company are given a majority of shares in the new company B. Spin-offs are not taxed if the shareholders of the parent company are given at least 80% of the shares in the new company C. Gains or losses from carve-outs are taxed at the corporate tax rate D. In Carve-outs, parent company has the majority control 2 5. The main characteristics of Leveraged Buy Outs (LBOs) are: A. High debt B. Private ownership C. Management incentives D. All of the above...
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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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Sample_Test_Question_Chapter_32 - III) Transfer business...

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