Reference no: EM133059742
1. In an exchange offer, shareholders can retain their investment in the parent company while investing in the subsidiary
True
False
2. Which of the following are least likely reasons for corporate restructuring?
a. Change of corporate strategy
b. Financial distress
c. Favourable acquisition offer
d. Need for funds to finance an acquisition
3. In case of spin-offs which of the following statements is least likely to be incorrect
a. Shareholder approval is not required
b. There is a wealth transfer from bond holders to shareholders
c. All of the above
d. Shares of the new company are given to shareholders of the parent company
4. The sale of a portion of a firm's assets, operations, or divisions to a third party is referred to as a:
a. Liquidation
b. Divestiture
c. Merger
d. Restructuring
5. The sell-offs by Starwood following its acquisition of Taittinger were motivated by:
a. Eliminating a nonstrategic component
b. Eliminating a poorly performing unit
c. Raising cash to pay off debt
d. None of the above
6. Which of the following forms of corporate restructuring are least likely to atttract new investors and/or result in a change in ownership?
a. Split up
b. Spin-off
c. Tracking stock
d. None of the above
7. In case of a carve-out
a. Shares of the new company can be sold in a primary or secondary offering
b. Cannot be reversed
c. Benefits may accrue to the parent company
d. Is always linked to a spin off
8. Which of the following statements is least likely true
a. None of the above
b. Divestitures may be a result of financial duress
c. Divestitures may be a result of a poor strategic fit
d. Divestitures may be a result of an ambiguous identity
9. Which one of the following is most likely to result in an elimination of the parent company?
a. Spin-off
b. Split-off
c. Carve-out
d. Split-up
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