Why risk management might increase the value of a firm

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Reference no: EM131230548

Q1. Define each of the following terms:

a. Synergy; merger

b. Horizontal merger; vertical merger; congeneric merger; conglomerate merger

c. Friendly merger; hostile merger, defensive merger; tender offer; target company; breakup value; acquiring company

d. Operating merger; financial merger

e. Free ash flow to equity

f. Purchase accounting

g. White knight: proxy fight

h. Joint venture; corporate alliance

i. Divestiture; spin-off

j. Holding company; operating company; parent company

k. Arbitrage; risk arbitrage

Q2. Give two reasons why stockholders might be indifferent between owning the stock of a firm with volatile cash flows and that of a firm with stable cash flows.

Q3. List six reasons why risk management might increase the value of a firm.

Reference no: EM131230548

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