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Question
_________________ is a danger faced by the stockholders of an acquiring firm in a merger if excessive numbers of new shares are issued relative to the value of their old shares.
A. Earnings volatility
B. Reduction of the exchange ratio
C. Dilution of ownership
D. Increased risk of bankruptcy
E. None of the options is correct
Answer
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Related questions
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A. Loan and lease loss allowance is added to gross loans.
B. Unearned income is subtracted from gross interest received.
C. Investment income is added to gross interest received.
D. Loan and lease loss allowance and unearned income is subtracted from gross loans.
E. Loan and lease loss allowance is subtracted from gross loans and investment income is added to gross interest received.
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The short-term securities of the bank, including T-Bills and commercial paper, are often called __________________________ because they are the second line of defense to meet demands for cash.
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C. more employees than other banks.
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Which of the following would not be a telephone service that customers can get from a bank call center?
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B. A fax copy of a loan application to the bank
C. List of what transactions have passed through the account
D. Access to their safety deposit box
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A(n) _________________________ is an agreement between a buyer and a seller today which calls for the delivery of a particular security in exchange for cash at some future date for a set price.
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Maryellen Epplin notices that a particular T-Bill has a banker's discount rate of 9 percent in the Wall Street Journal. She knows that this T-Bill has 20 days to maturity and has a face value of $10,000.
What is the yield to maturity on this T-Bill?
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Which of the following would be an example of a repriceable asset?
A. Money the bank has borrowed from the money market
B. Cash in the vault
C. Demand deposits that do not pay interest
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A bank is liability sensitive, if its:
A. deposits and non-deposit borrowings are not affected by changes in interest rates.
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The _______________ is determined by the demand and supply for loanable funds in the market.
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A bank has Federal Funds totaling $25 million with an interest-rate sensitivity weight of 1.0. This bank also has loans of $105 million and investments of $65 million with interest rate sensitivity weights of 1.40 and 1.15 respectively. It also has $135 million in interest-bearing deposits with an interest rate sensitivity weight of 0.90 and other money market borrowings of $75 million with an interest rate sensitivity weight of 1.0. What is the dollar interest-sensitive gap for this bank?
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B. -$15 million
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A. 100,000 shares
B. 33,333 shares
C. 46,667 shares
D. 214,286 shares
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According to the textbook, the lackadaisical profit performance surrounding a merger may be explained by the:
A. tax inefficiencies due to a merger.
B. lenders cutting off credit lines due to the merger.
C. accounting irregularities when reporting earnings of the combined entity.
D. managerial hubris and sizeable merger premium that acquirers have to pay to shareholders of the acquired firms.
E. All of the options are correct.
Q:
According to the textbook, bank mergers are often motivated by:
A. profit potential.
B. expected reduction in the risk of fluctuations in cash flow and earnings.
C. expected tax benefits.
D. market-positioning strategies.
E. All of the options are correct.
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According to FASB, goodwill must now be amortized over its useful life.
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The most important goal of any merger should be to increase the market value of the surviving firm.
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The merger of Bank of America and Security Pacific in 1992 resulted in an expansion of branch offices for both banks.
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According to the textbook, the financial success of a bank merger depends heavily upon the comparative dollar amounts of earnings reported by the two banking organizations and their relative price-earnings ratios.