Discuss the following questions/topics using the textbook and additional research.  Your answers must include 2 sources other than the textbook, 1 biblical integration, and be in APA format, a title page and abstract are not required.

Your analysis per question should be at least a half- to a full-page of original written analysis, not including the question.    Insufficient written analysis per question will not be eligible for full credit to be earned.

Please make sure to label your work and include references at the end of the paper, and to number your questions.

You should include a section on what the text states regarding the topic, what an Internet reference(s) state regarding the topic, and then provide a detailed original commentary on what you have learned regarding the question’s topic.

Again, I would strongly encourage you to write more than just a 1/2 page of analysis, and limit your use of quotations.   You will not be eligible for full credit on the question if blocks of quotations are utilized.

Remember that zero points will be earned on the entire homework assignment if plagiarized work is present in the written document.  Homework assignments that are plagiarized will earn an automatic zero points.  Plagiarized work will also be reported directly to Liberty University for administrative processing, so please remember to quote or to write original personal commentary analysis.

The page numbers provided are for the 6th edition of the text, and the page numbers in brackets are for the 7th edition of the text.

1. Discuss the Williams Act and the implications it places on mergers and acquisitions.
   1. The Williams Act is discussed in the text on pages 77 to 88 (73-80, 252-254, & 641).  You may want to discuss sections 13D and 14D of the Williams Act.
      1. https://media2.mofo.com/documents/faqs-schedule-13d-g.pdf
2. Describe and discuss why the time period of a commencement offer is crucial in an offer.
   1. The commencement of the offer is discussed in the text from pages 81 to 82 (78).
3. Discuss the implications of Wellman v. Dickinson in the U. S. District Court for mergers and acquisitions.
   1. The Wellman v. Dickinson case is discussed in the text on pages 84 and 257 (80-82).
      1. You may want to discuss the Eight Factor Test.
         1. http://homepages.wmich.edu/~edwards/622/readings/DEFIN.html
         2. https://h2o.law.harvard.edu/collages/3628
4. Choose two of the U. S. State Corporation laws defined in your text.  What implications do these laws or legal principles create for the buyer and seller?
   1. Begin your readings on page 98 (96) under the section titled, “U.S. State Corporation Laws and Legal Principles”.
5. Why are state antitakeover laws important?  Who are these laws designed to protect?
   1. The topic of antitakeover laws begins on page 101 (99).  You may want to discuss poison pills.
      1. https://www.youtube.com/watch?v=OIxH3R9iC6U

6.  Discuss SEC Rule 10b-5.  How does this rule protect shareholders who incur losses?

1. This section is covered under insider trading on pages 109-110 (108-110).
2. SEC Rule 10b-5:  https://www.investopedia.com/terms/r/rule10b5.asp
3. https://www.youtube.com/watch?v=Sp4f_Lsppkc
4. You will want to address insider trading.

7.  The Sherman Antitrust Act of 1890 provides the foundation of antitrust law.  Discuss at least two of the other Acts that pertain to antitrust.

1. The Sherman Antitrust Act of 1980 begins on page 111 (110).  Section 1 and 2 are addressed on this page.
2. https://business-law.freeadvice.com/business-law/trade_regulation/anti_trust_act.htm
3. https://www.investopedia.com/terms/s/sherman-antiturst-act.asp
4. The Sherman Anti-Trust Act Explained:  US History Review:
   1. https://www.youtube.com/watch?v=_DSN0uUNLOw

8.  Acquisition is a popular growth strategy, why?

1. The Growth strategy begins the readings on Chapter-4’s Merger Strategy.

9.  How does the synergistic effect influence mergers and acquisitions?

1. Synergy begins on page 136 (136) of the text.
2. You may want to address the equations 4.1 and/or 4.2.
3. You may want to address the differences between operational verses financial synergies.

10.  Discuss diversification as it relates and drives corporate strategy.

1. The topic of diversification begins on page 148 (146) of the text.
2. You may want to address the differences between a horizontal verses vertical integration.

1.) The ________ method provides the number of years required for a project to repay its initial investment. a. modified internal rate of return b. internal rate of return c. net present value d. payback

2.) Crater Lake Diagnostics Inc. is considering the purchase of a new piece of equipment that has an initial investment of $75,000, has annual expenses associated with its operation of $10,000 per year and has a six year life. What is the equivalent annual cost of this investment if the firms considers the appropriate discount rate to be 11%? a. $17,728 b. $19,551 c. $22,500 d. $27,728

3.) The ________ method is a capital budgeting technique for evaluating projects of unequal lives. a. equivalent annual cost b. equal amortization c. straight-line annuity d. none of the above

4.) The profitability index method of project evaluation provides an answer that is a ______. a. rate of interest b. dollar value. c. time period d. ratio

5.) Which of the following statements regarding the MIRR and how it solves problems with the IRR is not accurate? a. The MIRR eliminates the problem of multiple IRRs. b. The MIRR eliminates the problem of the assumption of always reinvesting at the IRR. c.The MIRR eliminates the problem of arbitrarily choosing a required rate of return (AKA the hurdle rate). d. all of the above are accurate

6.) If a project has a ________ NPV, it should also have an IRR ________ the hurdle rate. a. positive; greater than b. positive; less than c. negative; greater than d. negative; equal to

7.) The ________ measure is similar to the yield to maturity measure for bonds. a. NPV b. IRR c. MIRR d. payback

8.) The decision rule for net present value declares that a project is acceptable if ______. a. it pays back within a specified time period b. the rate of return is greater than the firm’s cost of capital c. the present value of the cash inflows exceeds the initial cash outflow d. all of the statements above are true

9.) Corporate bond yields are higher than similar maturity government bond yields due to ______. a. higher overall tax rates on corporate bonds than on government bonds b. Interest rates are deductible as expenses for tax purposes c. they include a sinking fund feature d. greater risk on the part of corporate bonds

10.) Empirical evidence supports the notion that U.S. stock markets are generally _________ form efficient. a. weak b. semi-strong c. strong d. The studies have shown mixed results.

11.) The ________ is a regulatory document filed with the SEC that describes the details of the IPO and is meant to help investors make informed decisions. a. red herring b. prospectus c. indenture d. debenture

12.) Which of the following interest rates would be inappropriate for use as a base rate for a variable rate bond? a. the prime rate b. LIBOR c. a rate determined by the bond issuer’s board of directors d. the 10-year Treasury bond rate

13.) Which of the following statements is NOT true? a. Investments rated below BBB- are known as high quality bonds. b. Investment grade securities should include those with a bond rating of AA. c.

A “fallen angel” is a bond that at one time was an investment grade security, but whose bond ratings has subsequently dropped. d. Another colorful term for non-investment grade bonds is “junk bonds.”

14.) The least frequently issued capital financial instruments listed herein are ______. a. preferred shares b. common shares c. bonds d. all these instruments are issued in similar magnitude

15.) The ________ feature found with many issues of preferred stock requires that all current and past due preferred dividends must be paid prior to any dividend payout to common shareholders.

a. cumulative b. participating c. convertible d. historical

16.) Firms must make regular payments to ________ but are under no contractual obligation to pay dividends to ________. a. common stockholders; preferred stockholders b. preferred stockholders; bondholders c. bondholders; common stockholders d. common stockholders, bondholders

17.) ________ is a measure of dispersion and is one way of measuring the risk of securities and portfolios. a. Diversification b. Expected return c. Standard deviation d. Statistics

18.) Another name for market risk is ______. a. systematic risk b. standard deviation c. unsystematic risk d. total risk

19.) If a firm has publicly traded debt then the yield to maturity is approximately the same as ______.

a. the after-tax cost of debt b. the before-tax cost of debt c. the 10-year Treasury bond rate d. the WACC 20.) If a firm increases the amount of debt that it has this could lead to an increase in ______. a. financial risk b. the cost of equity c. both the cost of equity and the financial risk d. none of the above

21.) ________ represent current investor expectations about a firm whereas ________ are representations of historical costs. a. Book values; market values b. Market values; book values c. Regulators; investment bankers d. Common equity holders; bondholders

22.) A firm with a beta of 1.0 and when held in a well-diversified portfolio should be considered to have ________ risk than the market portfolio. a. less b. neither more nor less c. more d. There is not enough information to answer this question.

23.) Transit Design Inc. recently paid a $1.00 dividend, has a beta of 0.75, has determined that the market risk premium is 10% and the current risk-free rate is 4%. What is the firm’s required return on equity? a. 14.00% b. 14.50% c. 11.50% d. 8.50%

24.) If a firm does not have publicly traded debt and therefore does not have a yield to maturity as an estimate for its cost of debt, a common practice is to estimate the cost of debt by adding a premium to the rate on ______. a. the cost of accounts payable b. equity c. long-term government bonds d. collateralized debt obligations

25.) All else being equal, investors “like” ________ and “dislike” ________. a. risk; return b. return; risk c. standard deviation; risk d. diversification; return

Willie Terrell, Jr.

Liberty University

BUSI 600-Q 12.7

Below is a Likert-type scale that might be used to evalu­ate your opinion of the educational degree program in which you are enrolled. There are five response categories: Strongly Agree, Agree, Neither Agree nor Disagree, Dis­agree, and Strongly Disagree. If Strongly Agree (SA) repre­sents the most positive attitude, how would you value the items below? Record your answers to the items.

A. This program is not very challenging. SD

B. The general level of teaching is good. SA

C. I really think I am learning a lot from this program. SA

D. Students’ suggestions are given little attention here. SD

E. This program does a good job of preparing one for a career. SA

F. This program is below my expectations. SD

In what two different ways could such responses be used? What would be the purpose of each?

In the question listed above, the type of scale used to is called the Likert-type scale. Which is used on either a five or seven point scale of how much a person agree or disagree on something. However, there is a flaw in the results. The flaw from this scale is that, “if you have an item that does not work, the results will become a big mess and you will spend a lot of time trying to figure out the results” (Vanek, 2012). The survey is a great resource but it can also not be the best for certain questions. One perfect example is that if it is not your own opinion about something then it should not be used. I also think that agree and disagree should not be based on an attitude. Item that a person would agree with might not be a positive answer behind anything. But with the answers in this case will be added up and given a total score.

The survey questions could be considered hypothetical constructs. Most, companies gain data from surveys and not actually observing them physically. With that being said, “These credentials cause examiners to be careful about the ways certain aspects of measured attitudes predict behavior” (Cooper, 2017). When you are using the Likert scale, you have to take into consideration that people answers the questions based on their feelings and how they are being treated or performing. When I think about the attitudes of people, I think about the “Golden Rule”. In the bible it talks about treating people fairly and the right way. The perfect bible verse that will be essential for this situation is, “Do unto others, as you would have them to do unto you” (Matthew 7:12, King James Version). If companies or whomever it is distributing the surveys, treat others fairly the results will always be positive. But the one person who does not get what they want will always give negative feedback no matter what.

There are two different ways the responses can be used. The first way is a rating scale. The rating scale, “is used when contributors score an object or indicant without constructing a direct comparison to another object or attitude” (p. 271). Instead of having whether you agree or disagree, you can make it to where it can benefit everything on a numeric scale. The purposes of this scale it to make sure results are not based on a person’s feeling towards a company or individual. One great example is that if a person is failing a class, the student will likely give that professor all bad reviews because the class did not go in favor of that student.

The second response is can be sorting. According to the response sorting, “it will allow them to sort cards into piles established by the researcher to gain more data” (p.272). I think that it will give the people who are given surveys to visually answer the questions, which will allow everyone to have more data and better research. It is so important to have accurate data, this will allow everyone to gain the appropriate info needed in order to improve or continue doing what they are already doing. Also, it takes faith in order to succeed in life. The bible states that, “Jesus said that I am the way, the truth, and the life no man cometh to my father but by me” (John 14:6, KJV). If you are doing something with a positive attitude and keep the Lord in all of your plans, there is no way you can fall unless there was a door God did not want you to enter. But, if you are doing right by people and yourself, the Lord will bless you and you will not only have the research you need, but it will be honest and truthful information.