Which of the following is NOT a source of synergy in Acquisitions and Mergers?

• A) Economies of scale
• B) New technologies
• C) Reduction in Market Value
• D) Financial strength

A firm wants to acquire another firm by purchasing its assets. Which of the following methods firm can use to evaluate the financial aspects of this deal?

• A) Price earning ratio method
• B) Dividend valuation method
• C) Replacement cost method
• D) Present value method

Which of the following is NOT a reason for determining shares value in mergers and acquisitions?

• A) To impede the anti takeover bid of the predator company
• B) To value the company for stock exchange listing
• C) To value shares – for establishing value of share of retiring directors
• D) To set up the terms of takeovers

Employees’ buyout occurs through which of the following?

• A) Employees’ dividend scheme
• B) Employee stock ownership plan
• C) Employee long-term benefit scheme
• D) Employee empowerment scheme

To determine the financial health of Company A, Z-score analysis has been performed. Company A shows a score of 2.5, company will be considered in:

• A) None of the given options
• B) Safe Zone
• C) Distress Zone
• D) Grey Zone

Economies of scale, market share dominance, and technological advances are reasons most likely to be offered to justify a __________.

• A) Strategic acquisition
• B) Financial acquisition
• C) Divestiture
• D) Supermajority merger approval provision

Which of the following is generally the objective of the firms behind offering discount to customers?

• A) To improve the PE ratio
• B) To increase the bad debts
• C) To improve return on equity
• D) To improve the cash flow

Which of the following is an "income based method" for share valuation of a target firm?

• A) Break up value method
• B) Dividend valuation method
• C) Accumulated depreciation method
• D) Replacement cost method

In analyzing the financial health, a company will be considered in safe zone if z-score will be:

• A) Z > 2.99
• B) Z>1.22
• C) Z < 1.81
• D) 1.81 < Z < 2.99

Which of the following is an example of a vertical merger?

• A) A Commercial bank purchases a cooking oil Company
• B) A car manufacturer purchases a tire Company
• C) An investment bank purchases an airline Company
• D) An oil marketing Company purchases another oil marketing Company

Expansion of credit period by a firm involves which of the following types of risk?

• A) Additional cost of advertising
• B) Additional cost of production
• C) Additional cost of business
• D) Additional cost of funds and bad debts

The efficiency enhancing effect resulting from a strategic merger is called which of the following?

• A) Merger effect
• B) Synergy effect
• C) Acquisition effect
• D) Efficiency effect

Which of the following statements is CORRECT regarding forex prices?

• A) An offer price is always lower than bid price
• B) Bid price and offer price are always equal
• C) Offer price is higher than bid price
• D) A bid price is always higher than an offer price

Which of the following statements is FALSE regarding Foreign Exchange Market?

• A) In a foreign exchange market commodity is homogeneous
• B) Foreign exchange markets are very competitive
• C) In the foreign exchange market commodity is hetrogeneous
• D) There are many buyers and seller in the FX market

Which of the following statements is FALSE regarding buyout?

• A) The company may be sold to outside company
• B) The company may be liquidated
• C) The company management may save their jobs
• D) The company may be closed down

For the Dividend Discount Model, which of the following represents correct formula?

• A) Value of stock = Dividend per share / Growth rate - Dividend discount rate
• B) Value of stock = Dividend per share / Discount rate - Dividend growth rate
• C) Value of stock = Earnings per share / Interest rate - Expected growth rate
• D) Value of stock = Earning per share / Expected rate - Interest growth rate

Which of the following indicates a merger between unrelated businesses?

• A) Off-shore
• B) Horizontal
• C) Conglomerate
• D) Vertical

Suppose a company has the policy to pay Rs. 10 per share dividend (stable dividend policy) if the profit of the company increases, dividend per share will __________.

• A) Reduce to half
• B) Decrease
• C) Increase
• D) Remain same

With respect to a Cash flow statement, which of the following would be considered as a cash inflow?

• A) Increase in current liability
• B) Increase in current assets
• C) Can not be determined
• D) Decrease in current liability

Mr. Ahmed bought shares of a company A on 5th June, 2019. The ex-dividend date was 4th June, 2019 while record date at which shareholders’ record was maintained was 6th June, 2019. Would Mr. Ahmed receive the dividend?

• A) No, because Mr. Ahmed purchased shares after ex-dividend date.
• B) No, because Mr. Ahmed purchased shares before record date
• C) Yes, because Mr. Ahmed purchased shares after ex-dividend date.
• D) Yes, because Mr. Ahmed purchased shares before record date