FIN 325 Final Vocab 2 Flashcards
1
Q
wealth transfer
A
shareholders can steal from debtholders by cashing out assets that would likely be surrendered to debtholders
2
Q
options analogy
A
equity is like a call option on firm’s assets
3
Q
pre money valuation
A
value of firm before equity funding
4
Q
Tender offer (hostile takeover)
A
acquirer offers to buy target shares directly from shareholders to gain majority
5
Q
cash deal
A
Acquirer buy shares with cash
6
Q
stock swap
A
buy w/ own company shares
7
Q
Merger
A
acquirer assumes all assets & liabs of target, needs approval of shareholders
