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Learning Outcome Statements PDF Download
|1. Definitions and classifications|
a. classify merger and acquisition (M&A) activities based on forms of integration and relatedness of business activities;
|2. Motives for merger|
b. explain common motivations behind M&A activity;
c. explain bootstrapping of earnings per share (EPS) and calculate a company's postmerger EPS;
|3. Mergers and industry life cycle|
d. explain, based on industry life cycles, the relation between merger motivations and types of mergers;
|4. Transaction characteristics|
e. contrast merger transaction characteristics by form of acquisition, method of payment, and attitude of target management;
f. distinguish among pre-offer and post-offer takeover defense mechanisms;
g. calculate and interpret the Herfindahl-Hirschman Index and evaluate the likelihood of an antitrust challenge for a given business combination;
|7. Target company valuation|
h. compare the discounted cash flow, comparable company, and comparable transaction analyses for valuing a target company, including the advantages and disadvantages of each;
i. calculate free cash flows for a target company and estimate the company's intrinsic value based on discounted cash flow analysis;
j. estimate the value of a target company using comparable company and comparable transaction analyses;
|8. Bid evaluation|
k. evaluate a takeover bid and calculate the estimated post-acquisition value of an acquirer and the gains accrued to the target shareholders versus the acquirer shareholders;
l. explain how price and payment method affect the distribution of risks and benefits in M&A transactions;
|9. Who benefits from mergers?|
m. describe characteristics of M&A transactions that create value;
|10. Corporate restructuring|
n. distinguish among equity carve-outs, spin-offs, split-offs, and liquidation;
o. explain common reasons for restructuring.
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