Company A is subject to a takeover bid from Company B, both companies operate in the same industry and each of them demand a significant market share Company B h3S made an of an of $5 per share to the shareholders of Company A.
The directors of Company A do not believe the takeover would be h the best interests of the stakeholders and other stakeholders of Company A due to the following reruns
1. Company B has recently taken ever several ether companies resulting in them breaking up the company and se ling on the assets.
2 The directors of Company A believe the offer of $5 per snare undervalues tie company The directors of Company A are therefore keen to prevent the bid from going ahead Which THREE of the following defence strategies could be used by the directors of Company Air this situation?

• A.Give existing shareholders the right to buy bonds in the future.
• B.Inform shareholders of the potential current value of the non-current assets including intangibles, to show that their true value is higher than the bid value.
• C.Refer the bid to the Competition Authorizes because of the risk of a large number of employee redundancies if Company B's Did were to be successful
• D.Appeal to their own shareholders that the company should not be broken up because i: has strong growth prospects.
• E.Offer the company to an alternative While Knight bidder.

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A company is planning to repurchase some of its shares. Relevant details are as follows:
* 100 million shares in issue
* Current share price $5
* 5 million shares to be repurchased
* 10% repurchase premium
* Repurchased shares to be cancelled
What would you expect the share price after the repurchase to be?
Give your answer to two decimal places.
$ ?

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A company generates and distributes electricity and gas to households and businesses.
Forecast results for the next financial year are as follows:

The Industry Regulator has announced a new price cap of $2.00 per Kilowatt.
The company expects this to cause consumption to rise by 15% but costs would remained unaltered.
The price cap is expected to cause the company's net profit to fall to:

• A.$126.50 million loss
• B.$43.00 million profit
• C.$8.75 million profit
• D.$164.00 million profit

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A company has a covenant on its 5% long-term bond, stipulating that its retained earnings must not fall below
$2 million.
The company has 100 million shares in issue.
Its most recent dividend was $0.045 per share. It has committed to grow the dividend per share by 4% each year.
The nominal value of the bond is $60 million. It is currently trading at 80% of its nominal value.
Next year's earnings before interest and taxation are projected to be $11.25 million.
The rate of corporate tax is 20%.
If the company increases the dividend by 4%, advise the Board of Directors if the level of retained earnings will comply with the covenant?

• A.Covenant is not breached as retained earnings = $2.10 million.
• B.Covenant is breached as retained earnings = $1.92 million.
• C.Covenant is not breached as retained earnings = $2.40 million.
• D.The covenant is not breached as retained earnings = $4.68 million.

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Company Z has just completed the all-cash acquisition of Company A.
Both companies operate in the advertising industry.
The market considered the acquisition a positive strategic move by Company Z.
Which THREE of the following will the shareholders of Company Z expect the company's directors to prioritise following the acquisition?

• A.The development of a dividend policy to meet the expectations of the target company shareholders.
• B.The retention of key customers of the acquired company.
• C.The realisation of anticipated post-acquisition synergies.
• D.The regulatory approval required to complete the acquisition.
• E.The integration and retention of key employees.

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