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a) Takeover defences are commonly employed by company management, if they are concerned about potential future bids

Accounting

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a) Takeover defences are commonly employed by company management, if they
are concerned about potential future bids. Briefly describe some common
defences, both pre- and post-bid.

 

b) Whenever a proposed merger or acquisition is announced, it will be accompanied
by a claim that there will be benefits for shareholders. Identify the more common
reasons offered as to why a benefit can be expected, and discuss whether or not
they are realistic. Briefly review available research evidence on what is the actual
impact of mergers and acquisitions.

 

c) Outline the practical issues that a financial manager should take into account
when determining the level of the next dividend that will be paid to shareholders.
Your answer should include an explanation of both the Signalling Hypothesis and
the Clientele Effect. (10 Marks)

 

d) Compare a share repurchase with a cash dividend, and suggest possible reasons
why a company may repurchase shares. Review evidence on the incidence of
share repurchases. Conclude by describing the methods available to a company
that wishes to repurchase shares.