Topic 6: Corporate restructuring

What is the main goal of corporate restructuring?

• Reducing competition

• Enhancing shareholder value

• Merging two companies

• Merging two companies

Financial restructuring is often done in response to financial jeopardy.

• True

• False

Which of the following is a type of corporate restructuring?

• Financial restructuring

• Technological restructuring

• Human resource restructuring

• Brand restructuring

What does a vertical merger refer to?

• A merger between unrelated businesses

• A merger between companies in different industries

• A merger along the supply chain

• A merger between two competing companies

  - B) A merger along the supply chain

Which of the following is NOT a reason for a merger?

• Access to a new market

• Reduction of competition

• Operating economies

• To increase the tax burden

What is the purpose of a financial acquisition?

• To reduce costs and sell off unnecessary assets

• To diversify product offerings

• To purchase a company purely for strategic objectives

• To gain control over a critical supplier

Which of the following best describes a conglomerate merger?

• Merger between companies offering the same products

• Merger between suppliers and distributors

• Merger between companies in the same supply chain

• Merger between companies in different industries

What is a synergy in the context of mergers and acquisitions?

• The total cost of merging two companies

• A financial gain after liquidation

• The combined benefits of resources after a merger

• The elimination of competition through acquisition

Which method of company valuation is based on discounted future cash flows?

• Asset-based approach

• Earnings-based approach

• Present value approach

• Market price approach

What does organizational restructuring focus on?

• Redesigning job positions and downsizing

• Changes in the capital structure

• Merging with a competitor

• Issuing new stock