Subject Code: 2840201
GUJARAT TECHNOLOGICAL UNIVERSITY
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MBA — SEMESTER - 4 EXAMINATION - WINTER 2015
Subject Name: Mergers & Acquisitions
Time: 02.30 PM TO 05.30 PM
Date: 02/12/2015
Total Marks: 70
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Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
Q.1 (a) Define Corporate Restructuring and Explain Merger, Divesture & Demerger. 07
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(b) Highlight the differences between the Pooling of Interest Method & Purchase Method with respect to Accounting Standard 14. 07
Q.2 (a) What are the challenges of the Due Diligence process in India? 07
(b) Explain in detail various payment methods used in Mergers & Acquisition. 07
OR
(b) Explain in detail the concept of Leveraged Buyout (LBO). Highlight the difference between LBO and an Acquisition. 07
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Q.3 (a) What is Buyback of Shares? What are the possible reasons for Buyback? 07
(b) What are the different types of takeover defenses? 07
OR
Q.3 (a) Write a note on Competition Act. 07
(b) A company has 5, 00,000 equity shares of Rs. 10 each fully paid up. The company’s expected earnings after tax is Rs. 34, 00,000 and its current P/E multiple is 5. Calculate the value of the firm. 07
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Q.4 (a) Following are the particulars of two companies A Ltd. & B Ltd:
| Particulars | A Ltd | B Ltd |
|---|---|---|
| Earnings after tax (EAT in Rs.) | 4,00,000 | 1,20,000 |
| Number of Equity shares | 16,000 | 8,000 |
| Earnings Per Share in Rs. | 25 | 15 |
| P/E Ratio | 10 | 8 |
| Market Price | 250 | 120 |
Calculate Exchange Ratio based on Earnings Per share (EPS) & Market Price both and determine the value of the firm for both cases. 07
(b) Explain the concept of ESOP in detail 07
OR
Q.4 (a) How Strategic Alliances help an organization. Explain in detail by an example. 07
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(b) Explain the role of major factors that influence Cross Border Mergers and Acquisitions. 07
Q.5 (a) Explain the basic taxation issues in Amalgamation & Demerger. 07
(b) Explain the sections 390 to 394A and 396 and 396 A of Companies Act, 1956 07
OR
Q.5 (a) Explain in detail various methods used to do the valuation of Business in an M&A activities. 07
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(b) Explain the term Synergy. Explain how the firms can achieve synergetic benefits through M & A activity. 07
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