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NEW QUESTION: 1
Voyager Inc., a primarily internet-based media company, is buying The Daily, a media company with exposure to newspapers, television, and the internet.
Voyager's acquisition of The Daily is The company's second major acquisition in its history. The previous acquisition was at the height of the merger boom in the year 2000. Voyager purchased the Dragon Company at a premium to net asset value, thereby doubling the company's size. Voyager used the pooling method to account for the acquisition of Dragon; however, because of FASB changes to the Business Combination Standard, Voyager will use the acquisition method to account for the Daily acquisition.
Voyager has made an all-cash offer of $45 per share to acquire The Daily. Wall Street is skeptical about the merger. While Voyager has been growing its revenues by 40% per year, The Daily's revenue growth has been less than 2% per year. Michael Renner. the CFO of Voyager, defends the acquisition by stating that The Daily has accumulated a large amount of tax losses and that the combined company can benefit by immediately increasing net income after the merger. In addition, Renner states that the New Voyager will eliminate the inefficiencies of the internet operations and thereby boost future earnings. Renner believes that the merged companies will have a value of $17.5 billion.
In the past, The Daily's management has publicly stated its opposition to merging with any company, a position management still maintains. As a result of this situation, Voyager submitted their merger proposal directly to The Daily's board of directors, while the firm's CEO was on vacation. Upon returning from vacation, The Daily's CEO issued a public statement claiming that the proposed merger was unacceptable under any circumstances.
The management of The Daily is not pleased with the $45 per share offering price. Which of the following is the most likely takeover defense The Daily would consider in an effort to stop the acquisition?
A. File suit against Voyager for antitrust violations.
B. Immediately amend The Daily by-laws to establish a staggered board.
C. Restrict the voting rights of shareholders owning more than 10% of The Daily stock.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
The legal action based on antitrust is the only choice given that is a post-offer defense. Staggered boards, restricted voting rights, and poison puts are all pre-offer defenses that would not be possible after the tender offer has been made. (Study Session 9, LOS 31.f)
NEW QUESTION: 2
Which one is an inferior good?
A. None of them.
B. A Veblen good.
C. A Giffen good.
Answer: C
Explanation:
Veblen goods are not inferior goods. The two are fundamentally different.
NEW QUESTION: 3
What does the risk framework add to an object (user, server or other type) to indicate increased risk?
A. A risk profile.
B. An aggregation.
C. An urgency.
D. A numeric score.
Answer: B
Explanation:
Reference:
https://docs.splunk.com/Documentation/ES/6.1.0/User/RiskScoring
