ABFM C - Unit 18 - Motivational Banker

1. Which aspect is NOT a key element of deal structuring in M&A?

Choosing the acquisition vehicle

Payment method

Long-term market analysis

Legal form of the selling entity

Question 1 of 40

2. What crucial role does financial modeling play in M&A deals?

Estimating taxation liabilities

Analyzing market trends

Determining post-closing integration

Assessing financial feasibility

Question 2 of 40

3. How can corporate or divisional structures benefit an acquiring entity?

Facilitate post-closing integration

Reduce tax liabilities

Limit management control

Slow decision-making

Question 3 of 40

4. Which structure is suitable for transferring ownership to employees with tax advantages?

Holding Company Structure

Joint Ventures

ESOP structures

Corporate or Divisional Structure

Question 4 of 40

5. In tax considerations for M&A, who primarily focuses on assessing the tax basis of acquired assets?

Seller

Buyer

Target company

Shareholders

Question 5 of 40

6. What is the primary factor determining whether a transaction can be tax-free in M&A?

Target company's market value

Acquirer's goodwill

Continuity of ownership interests

Nature of payment

Question 6 of 40

7. Which aspect does the RBI guidelines restrict Indian banks from financing in cross-border acquisitions?

Acquisition of equity shares

Debt financing

Foreign portfolio investments

Offshore special purpose vehicles

Question 7 of 40

8. What type of acquisition involves foreign acquirers purchasing Indian shares?

Inbound acquisitions

Outbound acquisitions

Joint ventures

Holding company acquisitions

Question 8 of 40

9. What does the Prudential Framework for Resolution of Stressed Assets mandate?

Time-bound resolution of stressed assets

Mandatory financial disclosures

Capital reserve requirements

Taxation reforms for distressed assets

Question 9 of 40

10. Which association typically publishes credit agreements for acquisition financing?

RBI

SEBI

APLMA

LMA

Question 10 of 40

11. What is the primary role of the Asia Pacific Loan Market Association (APLM(a) and Loan Market Association (LM(a) in acquisition financing?

Setting interest rates for loans

Regulating cross-border transactions

Publishing forms for credit agreements

Facilitating tax exemptions

Question 11 of 40

12. In the context of financing cross-border acquisitions, what do FOCCs rely on for funding?

Indian banks and financial institutions

Overseas debt funds

Non-banking financial companies (NBFCs)

External commercial borrowings (EC(b)

Question 12 of 40

13. What significant opportunity has the Insolvency and Bankruptcy Code (IB(c) of 2016 created?

Mandatory mergers for distressed entities

Tax exemptions for struggling businesses

Statutory process for acquiring distressed enterprises

Restructuring domestic banks

Question 13 of 40

14. What mode of financing is particularly flexible for Indian acquirers in outbound acquisitions?

Non-banking financial companies (NBFCs)

Indian banks and financial institutions

Offshore special purpose vehicles (SPVs)

External commercial borrowings (EC(b)

Question 14 of 40

15. Which regulatory authority oversees subscriptions by foreign portfolio investors (FPIs)?

RBI

SEBI

NCD

IBC

Question 15 of 40

16. What kind of acquisition involves Indian companies directly acquiring foreign entities?

Inbound acquisitions

Outbound acquisitions

Joint ventures

Holding company acquisitions

Question 16 of 40

17. Which financing source has a more lenient regulatory environment compared to banks in the context of acquisition financing?

Indian banks

Non-banking financial companies (NBFCs)

International banks

Offshore lenders

Question 17 of 40

18. What mandates time-bound resolution of stressed assets in the banking sector?

SEBI guidelines

RBI regulations

Prudential Framework for Resolution of Stressed Assets

NCD maturity requirements

Question 18 of 40

19. Which financing method cannot be used by Indian banks for offshore organizations acquiring Indian company shares?

External commercial borrowings (EC(b)

Non-convertible debentures (NCDs)

Capital market funds

Assurances from the Indian target

Question 19 of 40

20. What is a key factor that determines whether a transaction can be tax-free in M&A?

Nature of the industry

Duration of the deal structuring

Continuity of business enterprise

Financial modeling accuracy

Question 20 of 40

21. What role does financial modeling play in mergers and acquisitions (M&(a)?

Determines the company's market share

Assesses the performance of the acquired entity

Evaluates the impact of deal structuring on financing

Predicts industry trends

Question 21 of 40

22. In a corporate or divisional structure, why might immediate integration be preferred?

To ensure limited liability

To maintain target independence

To minimize tax liabilities

To gain greater control over the acquired entity

Question 22 of 40

23. When is a holding company structure considered ideal in acquisitions?

When seeking tax exemptions

When the acquired entity is financially unstable

When dealing with foreign corporations

When immediate integration is planned

Question 23 of 40

24. Which payment method might be preferred for companies with borrowing capacity and control considerations?

Convertible securities

Non-cash (common stock)

A mix of cash and non-cash

Cash

Question 24 of 40

25. What role do convertible securities play in uncertain acquisition scenarios?

Offer a fixed value irrespective of share appreciation

Secure a higher offer fairness

Provide a floor value and allow share appreciation participation

Guarantee tax-free transactions

Question 25 of 40

26. In the context of taxable mergers, which type involves a direct cash transaction?

Direct cash mergers

Direct stock mergers

Triangular mergers

Stock-for-stock mergers

Question 26 of 40

27. What is the primary concern for shareholders in a taxable cash purchase of target assets?

Increased tax liability

Double taxation during liquidation

Selling their stock at a loss

Decreased depreciation benefits

Question 27 of 40

28. For a transaction to be tax-free, what condition must be met concerning the acquirer's stock?

It should be overvalued

It should be held for a specific duration

It should be acquired at a discount

It should ensure continuity of ownership interests

Question 28 of 40

29. In cross-border acquisitions, what regulatory authority in India oversees foreign portfolio investors?

RBI

SEBI

IBC

NCD

Question 29 of 40

30. What is the primary function of the Prudential Framework for Resolution of Stressed Assets introduced by the RBI in 2019?

Mandate leveraged buyouts in acquisitions

Resolve stressed assets within a specific time frame

Regulate cross-border acquisitions

Facilitate tax exemptions for distressed entities

Question 30 of 40

31. What do Asia Pacific Loan Market Association (APLM(a) or Loan Market Association (LM(a) forms primarily guide in acquisitions?

Formation of deal structures

Negotiation processes

Acquisition financing agreements

Post-closing organizational structures

Question 31 of 40

32. Which type of financing involves foreign portfolio investors in Indian acquisitions?

External commercial borrowings (EC(b)

Financing through Indian banks

Domestic acquisition finance

Leveraged buyouts

Question 32 of 40

33. What are the concentration limits set for foreign portfolio investors (FPIs) concerning NCDs?

Limits on the number of NCDs issued

Restrictions on investing in Indian acquisitions

Limits on total investment amounts

No specific concentration limits for FPIs

Question 33 of 40

34. In India, who is primarily responsible for regulating the restrictions on financing equity share acquisitions?

RBI

SEBI

NCD

IBC

Question 34 of 40

35. What is the major role of the Insolvency and Bankruptcy Code (IB(c) in Indian acquisitions?

Facilitate leveraged buyouts

Resolve distressed assets in a statutory process

Regulate cross-border acquisitions

Manage post-closing organization structures

Question 35 of 40

36. Which financing source enjoys a more lenient regulatory environment compared to banks in India?

Offshore lenders

Indian banks

Non-banking financial companies (NBFCs)

Foreign portfolio investors (FPIs)

Question 36 of 40

37. What limits the ability of Indian banks to finance offshore organizations for Indian company share acquisitions?

Indian exchange control restrictions

SEBI guidelines

NCD regulations

RBI guidelines on leveraged buyouts

Question 37 of 40

38. What primarily dictates the maturity requirements for non-convertible debt obligations (NCDs)?

SEBI guidelines

RBI regulations

IBC policies

Concentration limits set by FPIs

Question 38 of 40

39. What regulatory body oversees the guidelines set for leveraging the Indian market for share acquisitions?

SEBI

RBI

IBC

NCD

Question 39 of 40

40. Which source of financing allows Indian companies to secure funds from offshore lenders for overseas acquisitions?

Indian banks

Offshore special purpose vehicles (SPVs)

Non-banking financial companies (NBFCs)

External commercial borrowings (EC(b)

Question 40 of 40

ABFM C – Unit 18

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