Darryl Laws

 5.Mergers / acquisitions for diversification for greater economies of scale (saving of cost) do not necessarily create value because:

(Please check all that apply).

a company does not need to diversify; shareholders can diversify on their own.

diversification results in the parent company losing its focus.

a company should stay in the business it knows best.

6.Diversification can be a good reason to acquire of merge because it (Please check all that apply.):

reduces/avoids the need for external capital by transferring capital internally.

results in less devastating effects on the firm during economic downturns as not all sectors of a firm are expected to perform equally poorly during such downturns.

takes advantage of the seasonality of the production cycle,

7.    My firm was directly or indirectly involved in synergy-related mergers.

Yes

No

If the answer to #7 is no, please skip to question #9.

8. Decisions to make an acquisition or a Merger are driven by the following sources:

A. CEO overconfidence.

B. CEO hubris.

C. An overconfident CEO’s perspective that he and his team can manage the acquired company more efficient.

D. Increased compensation to the CEO and his staff.

9. The following source(s) most closely describes my firm’s M&A involvement during the period January 1, 2019 – December 31, 2019. (If more than one source was relevant, please rank the sources, 1 being the most important.)

Operating and financial economies

CEO hubris

Differential division efficiencies

  Driven by CEO remuneration for increased profits.

9.     My firm determines the share price / value of a target firm in the following manner.

We primarily use a discounted cash flow model.

We combine the discounted cash flow model with the following model(s). (Please fill in.)

We use market multiple analysis. (Please fill in.)

We use the betas from other public traded companies to correlate the value to (Please fill in.)

If your firm does not use a discounted cash flow model in evaluating mergers, please skip question #10.

10.  When employing the discounted cash flow model to determine the value of a target company , we determine the discount rate in the following manner:

We use my firm’s average cost of capital as the discount rate.

We use the target firm’s average cost of capital as the discount rate.

We use my firm’s cost of equity capital as the discount rate.

We use the target firm’s cost of equity capital as the discount rate.

We determine the discount rate by the following method. (Please fill in.)

Darryl Laws