XYZ has a variable rate loan of $200 million on which it is paying interest of Liber ' 3%.
XYZ entered into a swap with AG bank to convert this to a fixed rate 8% loan. AB bank charges an annual commission of 0.4% for making this arrangement
Calculate the net payment from KYZ to AB bank at the end of the first year if Libor was 2% throughout the year.
Give your answer in $ million, to one decimal place.

• A.22.8
• B.22.9

Correct Answer: A

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A company needs to raise $20 million to finance a project.
It has decided on a rights issue at a discount of 20% to its current market share price.
There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per share.
Calculate the terms of the rights issue.

• A.1 new share for every 4 existing shares
• B.1 new share for every 20 existing shares
• C.1 new share for every 5 existing shares
• D.1 new share for every 25 existing shares

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KKL is a listed sports clothing company with three separate business units. KKL is seeking to sell TT', one of these business units
TTP cwns a new. brand of trail running shoes that have Droved hugely popular with lone distance runners. The management team of TTP are frustrated by the constraints imposes b/ KKL in managing tie brand and developing. the bus ness and they believe that TTF has huge growth potential.
The management team of TTP have approached KKL with a proposal to purchase 1~P through a management layout (MDO). KKL has accepted this proposal as TTP has not proved to be a good fit' with the rest of the business and has agreed on the selling price.
Which THREE of the following factors a-e mast Likely to affect the success of the MBO?

• A.The constraints imposed by KKL managing TTF's brand.
• B.The ability the TTP management team to develop the brand and achieve the expected growth.
• C.The ability of the TTF management team to take over the head office functions successfully.
• D.Searing sufficient. funding for the MBO.
• E.The motivation of the TTP management team to invest in future growth.

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Company A has just announced a takeover bid for Company B.
The two companies are large companies in the same industry_ The bid is considered to be hostile.
Company B's Board of Directors intends to try to prevent the takeover as they do not consider it to be in the best interests of shareholders Which THREE of the following are considered to be legitimate post-offer defences?

• A.Make a counter bid for Company A provided such an acquisition could enhance Company B's shareholder wealth
• B.Have all the assets independently professionally revalued to demonstrate that the offer undervalues the company
• C.Refer the bid to the competition authorities to try to have the bid prohibited on competition grounds
• D.Publish very optimistic financial forecasts for Company B even though the Board of Directors realises that these are highly unlikely to be achievable
• E.Alter the memorandum and articles of association to state that a minimum of 75% of shareholders must agree to the bid before it can proceed

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Company A, a listed company, plans to acquire Company T, which is also listed.
Additional information is:
* Company A has 150 million shares in issue, with market price currently at $7.00 per share.
* Company T has 120 million shares in issue,. with market price currently at $6.00 each share.
* Synergies valued at $50 million are expected to arise from the acquisition.
* The terms of the offer will be 2 shares in A for 3 shares in T.
Assuming the offer is accepted and the synergies are realised, what should the post-acquisition price of each of Company A's shares be?
Give your answer to two decimal places.

Correct Answer:

8.24

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