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| Contents of the Companion Website | |
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| Preface to the Seventh Edition | |
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| Acknowledgments | |
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| About the Author | |
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| The Mergers and Acquisitions Environment | |
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| An Introduction to Mergers, Acquisitions, and Other Restructuring Activities | |
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| Inside M&A: Brand Management-V.F. Corp. Buys Timberland | |
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| Chapter Overview | |
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| Why Mergers and Acquisitions Happen | |
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| Historical Developments in Mergers and Acquisitions | |
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| Understanding Corporate Restructuring Activities | |
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| Alternative Takeover Strategies | |
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| The Role of Holding Companies in Mergers and Acquisitions | |
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| The Role of Employee Stock Ownership Plans (ESOPs) in Mergers and Acquisitions | |
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| Business Alliances as Alternatives to Mergers and Acquisitions | |
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| Participants in the Mergers and Acquisitions Process | |
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| The Implications of Mergers and Acquisitions for Shareholders, Bondholders, and Society | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| The Regulatory Environment | |
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| Inside M&A: AT&T/T-Mobile Deal Short-Circuited by Regulators | |
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| Chapter Overview | |
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| Understanding Federal Securities Laws | |
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| Understanding Antitrust Legislation | |
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| The Implications for M&A of the Dodd-Frank Wall Street Reform and Consumer | |
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| Protection Act | |
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| State Regulations Affecting Mergers and Acquisitions | |
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| Restrictions on Direct Foreign Investment in the United States | |
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| The U.S. Foreign Corrupt Practices Act | |
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| Fair Disclosure (Regulation FD) | |
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| Specific Industry Regulations | |
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| Environmental Laws | |
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| Labor and Benefit Laws | |
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| Cross-Border Transactions | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| The Corporate Takeover Market | |
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| Inside M&A: Linkedln IPO Raises | |
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| Governance Issues | |
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| Chapter Overview | |
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| Corporate Governance | |
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| Understanding Alternative Takeover Tactics | |
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| What Makes the Aggressive Approach Successful? | |
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| Other Tactical Considerations | |
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| Developing a Bidding Strategy | |
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| Understanding Alternative Takeover Defenses | |
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| The Impact of Takeover Defenses on Shareholder Value | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| The Mergers and Acquisitions Process: Phases | |
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| Planning: Developing Business and Acquisition Plans | |
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| Inside M&A: From a Social Media Darling to an Afterthought-The Demise of Myspace | |
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| Chapter Overview | |
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| The Role of Planning in Mergers and Acquisitions | |
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| The Merger and Acquisition Process | |
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| Phase 1: Building the Business Plan | |
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| The Business Plan as a Communication Document | |
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| Phase 2: Building the Merger-Acquisition Implementation Plan | |
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| Some things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Implementation: Search Through Closing | |
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| Inside M&A: Sony's Strategic Missteps | |
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| Chapter Overview | |
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| Phase 3: The Search Process | |
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| Phase 4: The Screening Process | |
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| Phase 5: First Contact | |
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| Phase 6: Negotiation | |
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| Phase 7: Developing the Integration Plan | |
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| Phase 8: Closing | |
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| Phase 9: Implementing Postclosing Integration | |
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| Phase 10: Conducting a Postclosing Evaluation | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Postclosing Integration: Mergers, Acquisitions, and Business Alliances | |
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| Inside M&A: the Challenges of Integrating United and Continental Airlines | |
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| Chapter Overview | |
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| The Role of Integration in Successful Mergers and Acquisitions | |
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| Integration is A Process, not an Event | |
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| Integrating Business Alliances | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Mergers and Acquisitions Valuation and Modeling | |
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| Mergers and Acquisitions Cash Flow Valuation Basics | |
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| Inside M&A: Valuation Methodologies and Fairness Opinion Letters | |
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| Chapter Overview | |
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| Estimating Required Financial Returns | |
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| Risk Assessment | |
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| Calculating Free Cash Flows | |
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| Applying Discounted Cash Flow Methods | |
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| Using the Enterprise Method to Estimate Equity Value | |
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| Valuing Nonoperating Assets | |
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| Pulling It All Together | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Practice Prolems and Answers | |
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| Relative, Asset-Oriented, and Real-Option Valuation Basics | |
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| Inside M&A: Bristol-Myers Squibb Places a Big Bet on Inhibitex | |
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| Chapter Overview | |
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| Relative-Valuation Methods | |
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| Asset-Oriented Methods | |
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| The Weighted-Average Valuation Method | |
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| Adjusting Valuation Estimates for Purchase Price Premiums | |
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| Real-Options Analysis | |
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| Determining When to Use the Different Approaches to Valuation | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Practice Problems and Answers | |
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| Applying Financial Models | |
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| Inside M&A: HP Buys EDS-The Role of Financial Models in Decision Making | |
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| Chapter Overview | |
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| Limitations of Financial Data | |
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| The Model-Building Process | |
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| Assessing Impact of M&A's on Postacquisition Earnings Per Share | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Practice Problems and Answers | |
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| Analysis and Valuation of Privately Held Firms | |
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| Inside M&A: Taking Advantage of a "Cupcake Bubble" | |
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| Chapter Overview | |
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| What are Privately Held Companies? | |
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| Governance Issues | |
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| Challenges of Valuing Privately Held Companies | |
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| Process for Valuing Privately Held Businesses | |
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| Step 1: Adjusting Financial Statements | |
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| Step 2: Applying Valuation Methodologies to Privately Held Companies | |
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| Step 3: Developing Discount Rates | |
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| Step 4: Applying Control Premiums, Liquidity, and Minority Discounts | |
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| Reverse Mergers | |
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| Using Leveraged Employee Stock Ownership Plans (ESOPs) to Buy Private Companies | |
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| Empirical Studies of Shareholder Returns | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Practice Problems and Answers | |
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| Deal-Structuring and Financing Strategies | |
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| Structuring the Deal | |
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| Inside M&A: Illustrating How Deal Structure Affects Value-The Facebook/Instagram Deal | |
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| Chapter Overview | |
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| The Deal-Structuring Process | |
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| Form of Acquisition Vehicle and Postclosing Organization | |
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| Legal Form of the Selling Entity | |
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| Form of Payment | |
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| Managing Risk and Reaching Consensus on Purchase Price | |
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| Constructing Collar Arrangements | |
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| Form of Acquisition | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Structuring the Deal | |
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| Inside M&A: Johnson & Johnson Uses Financial Engineering to Acquire Synthes Corporation | |
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| Chapter Overview | |
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| Alternative Tax Structures | |
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| Taxable Transactions | |
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| Tax-Free Transactions | |
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| Other Tax Considerations Affecting Corporate Restructuring | |
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| Financial Reporting of Business Combinations | |
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| Impact of Purchase Accounting on Business Combinations | |
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| Recapitalization ("Recap") Accounting | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Practice Problems and Answers | |
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| Financing the Deal | |
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| Inside M&A: Lessons from Pep Boys' Aborted Attempt to Go Private | |
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| Chapter Overview | |
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| How are M&A Transactions Commonly Financed? | |
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| What is the Role of Private Equity, Hedge, and Venture Capital Funds in Deal Financing? | |
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| Leveraged Buyouts as Financing Strategies | |
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| What Factors are Critical to Successful LBOs? | |
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| How do LBOs Create Value? | |
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| Common LBO Deal and Capital Structures | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Highly Leveraged Transactions | |
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| Inside M&A: Kinder Morgan's Takeover of El Paso Raises Ethical Questions | |
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| Chapter Overview | |
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| How are LBOs Valued? | |
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| LBO Valuation and Structuring Model Basics | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Practice Problems | |
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| Alternative Business and Restructuring Strategies | |
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| Business Alliances | |
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| Inside M&A: Exxon-Mobil and Russia's Rosneft Create Arctic Oil and Gas Exploration Joint Venture | |
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| Chapter Overview | |
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| Motivations for Business Alliances | |
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| What Makes Business Alliances Successful? | |
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| Alternative Legal Forms of Business Alliances | |
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| Strategic and Operational Plans | |
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| Resolving Business Alliance Deal-Structuring Issues | |
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| Empirical Findings | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Alternative Exit and Restructuring Strategies | |
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| Inside M&A: The Warner Music Group is Sold at Auction | |
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| Chapter Overview | |
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| Why do Firms Exit Businesses? | |
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| Divestitures | |
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| Spin-Offs | |
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| Equity Carve-Outs | |
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| Split-Offs and Split-Ups | |
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| Tracking Stocks, Target Stocks, and Letter Stocks | |
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| Comparing Alternative Exit and Restructuring Strategies | |
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| Choosing Among Divestiture, Carve-Out, and Spin-Off Restructuring Strategies | |
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| Determinants of Returns to Shareholders Resulting from Restructuring Strategies | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Alternative Exit and Restructuring Strategies | |
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| Inside M&A: Photography Icon Kodak Declares Bankruptcy, a Victim of Creative Destruction | |
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| Chapter Overview | |
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| Business Failure | |
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| Voluntary Settlements Outside of Bankruptcy | |
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| Reorganization and Liquidation in Bankruptcy | |
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| Alternative Options for Failing Firms | |
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| Failing Firms and Systemic Risk | |
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| Predicting Corporate Default and Bankruptcy | |
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| Valuing Distressed Businesses | |
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| Empirical Studies of Financial Distress | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| Cross-Border Mergers and Acquisitions | |
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| Inside M&A: Sabmiller Acquires Australia's Foster's Beer | |
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| Chapter Overview | |
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| Globally Integrated Markets Versus Segmented Capital Markets | |
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| Motives for International Expansion | |
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| Common International Market Entry Strategies | |
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| Structuring Cross-Border Deals | |
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| Financing Cross-Border Deals | |
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| Planning and Implementing Cross-Border Transactions in Emerging Countries | |
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| How are Cross-Border Transactions Valued? | |
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| Empirical Studies of Cross-Border Transactions | |
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| Some Things to Remember | |
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| Discussion Questions | |
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| Questions from the CFA Curriculum | |
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| References | |
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| Glossary | |
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| Index | |