This strategy enables the existing shareholders of the target company to buy additional shares at a high discount rate.

Related MCQs

• ……. is the ratio in which an acquiring company will offer its own shares in exchange for the target company’s share during merger .
• Black & White Ltd. Has a cost of equity of 11% and a pre-tax cost of debt of 8.5%. The firm's target Weighted average cost of capital is 9% and its tax rate is 35%. What is the firm's target debt-equity ratio?
• The distribution of shares in a subsidiary to existing parent company’s stockholder is called ……
• National Ltd. Has 12,000 equity shares of Rs.100 each. Sale price is equity share Rs.115 per share; flotation cost Rs.5 per share. Expected dividend growth rate is 5% and expected dividend at the end of the financial year is Rs.11 per share, What is the cost of equity shares of National Ltd?
• …… is the process under which an existing large company purchases the business of another small company doing similar business.
• PQR Ltd. Is a profit-making company. It is absorbed into another group company XYZ Ltd. Which is a loss Company. This case is off
• Which of the following methods focuses the maximisation of wealth of shareholders?
• A shareholder invests in a Company's Shares mainly------
• …….. isa type of takeover in which the acquiring company turns itself into a subsidiary of the purchased company.
• A firm that acquires another firm as part of its strategy to sell off assets, cut costs, and operate the remaining assets more efficiently is engaging in __________.