Fundamentals of Financial Management, Third Edition

OBJECTIVE-TYPE QUESTIONS

1. Mark true or false.
   1. In equity carve-outs, the subsidiary’s shares are not sold to the public in general.
   2. Pure divestitures may be voluntary as well as compulsory.
   3. In the case of holding/subsidiary companies, preparation of the consolidated balance sheet is mandatory in India.
   4. SEBI needs to be informed if the acquisition involves more than 5% of the equity shares.
   5. In a deferred payment plan of payment of consideration value, the acquiring company makes the additional payment even if there is no growth in earnings.
   6. Equity shares are exchanged for the payment of consideration value.
   7. The floor price of the consideration value is equal to the market value of the shares of the target company.
   8. Vertical combinations occur among ...