Question

Which of the following M&A transaction equations is correct?
Value created - Stand-alone value - Net synergies - Consideration (price paid)
Value created - Consideration (price paid) - Net synergies - Transaction costs
0000
Value created - Hard synergies + Soft synergies - Transaction costs
Value created - Stand-alone value. Net synergies - Transaction costs

Answer 1

Explanation:

Main Question Set 14 Review Later Which of the following M&A transaction equations is correct? Value created = Stand-alone value + Net synergies - Transaction costs Value created = Hard synergies + Soft synergies - Transaction costs Value created = Stand-alone value + Net synergies - Consideration (price paid) Value created = Consideration (price paid) + Net synergies - Transaction costs

Main Question Set 15 Review Later What should a company do if it wants to reduce the number of shares outstanding? Pay cash dividends Invest in more projects Issue more debt Repurchase shares

Answer 2

Answer:

Value created = Hard synergies + Soft synergies - Transaction costs

Explanation:

• The term "mergers and acquisitions" (M&A) refers to a broad range of financial transactions, such as mergers, acquisitions, consolidations, tender offers, asset purchases, and management acquisitions, that result in the consolidation of businesses or assets.
• Although they are frequently used interchangeably, the phrases "mergers" and "acquisitions" have different meanings.
• In an acquisition, one business completely buys another.
• A merger is the joining of two businesses to create a new legal entity with a single corporate identity.
• By comparing companies in the same industry and employing measurements, a company can be appraised objectively.

M&A transaction equation:

Value created = Hard synergies + Soft synergies - Transaction costs

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