Series 79: Chapter 12 Practice Questions

Taken from our Series 79 Online Guide

Chapter 12 Practice Questions

1. Which of the following is most likely to cause the buy side in an acquisition to lower its offer?

A. A vocal minority on the target’s board regards the transaction as a hostile takeover.

B. The seller is considering a Section 338(h)(10) election.

C. The target has stable cash flow but slow growth.

D. Due diligence turns up public records indicating that the target is the defendant in a lawsuit.

2. Each of the following is a task typically performed by a buy-side adviser in a proposed merger or acquisition except:

A. Evaluating the credit implications of the proposed transaction

B. Analyzing the target’s finances

C. Finalizing the bidding process

D. Preparing an indication of interest

3. In a merger or acquisition, which of the following is a due diligence task normally performed by a sell-side adviser but not a buy-side adviser?

A. Performing due diligence on the seller

B. Evaluating the seller’s leadership team

C. Monitoring access to the data room

D. Coordinating site visits

4. When an LBO target has paid off most or all of the debt used to acquire it, the buyer is least likely to do which of the following?

A. Divest itself of the target by selling it

B. Hold the target long-term for strategic reasons

C. Conduct a leveraged recapitalization

D. Divest itself of the target through an IPO

5. A fairness opinion in a merger or acquisition is best described as:

A. A formal recommendation of approval or disapproval of the proposed transaction rendered by a target company’s board of directors

B. An evaluation rendered by an investment banker as to whether the proposed transaction is the best deal available under then-current circumstances

C. An opinion by legal counsel as to whether the proposed transaction meets all applicable legal and regulatory requirements

D. An opinion rendered by a third party as to whether a proposed transact

Since you're reading about Series 79: Chapter 12 Practice Questions, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 79
Please Enable Javascript
to view this content!