Corporate Finance Transactions Flashcards

1
Q

What are forms of expansion and divestiture

A

Mergers
Acquisitions
Strategic Alliances
Joint Ventures - joint control by 2+ ventures
Spin offs - a new company created from the existing company but mgmt and operations are separate though shareholders are the same

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2
Q

What are 4 transaction considerations

A

Anti-competition risk
Estimating Synergies
Valuation
Payment method

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3
Q

What is the anti-competition risk?

A

Might be denied by regulatory bodies due to reduced level of competition creates a detriment to general consumers

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4
Q

What are the 5 key risks in corporate finance

A
Growth and increased market power
Diversification 
Tax
Form of acquisition 
Manager incentives
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5
Q

What are synergies involved in combination with ethics

A

idea is combined entities are worth more than independently
Revenue may increase cux
increased market shares
Raised pricing due to reduced competition
Ability to cross sell products

Costs may decrease due to increase efficiency and economies of scale

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6
Q

What are 4 international considerations of corporate finance

A
  1. International sources of capital
  2. Exchange rate risks
  3. Economic Risk
  4. Political Risk
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