WITH ADJUSTED CAPM
VALUATION CASES ACROSS BORDERS
SUMMARY
NOTES
CHAPTER 13: Valuing the Highly Levered Firm, Assessing the Highly Levered Transaction
INTRODUCTION
THE WORLD OF HIGHLY LEVERED FIRMS
EFFECT OF LEVERAGE ON VALUE OF THE FIRM
“WHOLE DEAL” APPROACH TO EVALUATING THE HIGHLY LEVERED FIRM AND TRANSACTION
A LEVERAGED RECAPITALIZATION: KOPPERS COMPANY
A LEVERAGED BUYOUT: MEDIMEDIA INTERNATIONAL, LTD.
A LEVERAGED BUYOUT: REVCO DRUG STORES
SUMMARY
NOTES
CHAPTER 14: Real Options and Their Impact on M&A
INTRODUCTION
WHERE REAL OPTIONS APPEAR IN M&A
IF OPTIONALITY IS SO PERVASIVE, WHY NOT VALUE EVERYTHING AS AN OPTION?
HOW TO ASSESS THE IMPACT OF REAL OPTIONS
FOUR MINI-CASES IN THE ANALYSIS OF REAL OPTIONS
SUMMARY AND CONCLUSIONS
NOTES
CHAPTER 15: Valuing Liquidity and Control
INTRODUCTION
ADJUSTING VALUES FOR DISCOUNTS AND PREMIUMS
WHERE DO ILLIQUIDITY DISCOUNTS COME FROM? LIQUIDITY IS AN OPTION
WHERE DO CONTROL PREMIUMS COME FROM? CONTROL IS AN OPTION
INTERACTION OF LIQUIDITY AND CONTROL
MINI-CASE: ATTEMPTED ACQUISITION OF VOLVO BY RENAULT, 1993
CONCLUSION
NOTES
CHAPTER 16: Financial Accounting for Mergers and Acquisitions
INTRODUCTION
OVERVIEW OF PURCHASE ACCOUNTING
HOW TO INTERPRET REPORTED FINANCIAL RESULTS IN AN M&A TRANSACTION
LINKAGE AMONG ACCOUNTING CHOICES, FORM OF PAYMENT, FINANCING, AND PRICE
DANGERS OF EARNINGS MANAGEMENT
SUMMARY AND CONCLUSIONS
APPENDIX 16.1 Mechanics of Pooling-of-Interests Accounting
NOTES
CHAPTER 17: Momentum Acquisition Strategies: An Illustration of Why Value Creation Is the Best Financial Criterion
INTRODUCTION: FOUR CAUTIONARY TALES
MOMENTUM ACQUISITION STRATEGIES
ARGUMENTS FOR AND AGAINST MOMENTUM ACQUIRING
VALUE CREATION IS THE BEST CRITERION FOR EVALUATING ACQUISITION STRATEGIES
CONCLUSION: MOMENTUM STRATEGIES VERSUS VALUE STRATEGIES
APPENDIX 17.1 An Analytic Model of EPS Dilution
NOTES
11 PART Four: Design of Detailed Transaction Terms CHAPTER 18: An Introduction to Deal Design in M&A INTRODUCTION DEAL STRUCTURES ARE SOLUTIONS TO ECONOMIC PROBLEMS POSSIBLE DESIRABLES IN DESIGNING A DEAL THE DESIGN OF TERMS CAN HELP ACHIEVE OBJECTIVES EACH DEAL IS A SYSTEM: THE “WHOLE DEAL” PERSPECTIVE SOME IMPLICATIONS FOR THE DEAL DESIGNER SUMMARY AND CONCLUSIONS NOTES CHAPTER 19: Choosing the Form of Acquisitive Reorganization INTRODUCTION: FIVE KEY CONCERNS FOR THE DEAL DESIGNER THE FORM OF REORGANIZATION HAS IMPORTANT IMPLICATIONS DEALS THAT ARE IMMEDIATELY TAXABLE TO THE SELLING SHAREHOLDERS DEALS THAT DEFER TAX TO THE SELLING SHAREHOLDERS SUMMARY AND IMPLICATIONS FOR THE DEAL DESIGNER AND SENIOR EXECUTIVE NOTES CHAPTER 20: Choosing the Form of Payment and Financing INTRODUCTION PATTERNS AND TRENDS IN FORM OF PAYMENT DOES FORM OF PAYMENT MATTER? CONSIDERATIONS IN SELECTING THE FORM OF PAYMENT ASSESSING THE FINANCING ASPECTS OF A DEAL SUMMARY AND CONCLUSIONS NOTES CHAPTER 21: Framework for Structuring the Terms of Exchange: Finding the “Win-Win” Deal INTRODUCTION A MODEL FOR CRITICALLY ASSESSING EXCHANGE RATIOS USES OF THESE MODELS AN
