Mergers & Acquisitions Transactions Flashcards
6 cards from real Series 79 – Investment Banking Representative Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Mergers & Acquisitions Transactions flashcards as text
In an M&A transaction, what is a 'fairness opinion'?
Answer: An independent assessment by a financial advisor that the deal price is fair
A fairness opinion is an independent financial analysis provided by an investment bank concluding that the consideration offered in an M&A transaction is fair from a financial point of view.
Which merger structure allows the acquirer to purchase only selected assets and liabilities of the target company?
Answer: Asset acquisition
In an asset acquisition, the buyer selectively purchases specific assets and assumes only chosen liabilities, avoiding unwanted obligations of the target.
What is a 'lock-up agreement' in the context of M&A?
Answer: A restriction on target management from soliciting other bids after signing
A lock-up agreement restricts the target company from soliciting or entertaining competing bids after a merger agreement has been signed, protecting the acquirer's deal.
Under the Hart-Scott-Rodino (HSR) Act, when must parties notify the FTC and DOJ of a proposed merger?
Answer: When the transaction exceeds the applicable HSR threshold size-of-transaction test
The HSR Act requires pre-merger notification when a transaction meets both the size-of-transaction and size-of-person thresholds, triggering a mandatory waiting period.
What does 'accretion/dilution analysis' measure in an M&A context?
Answer: The impact of an acquisition on the acquirer's earnings per share (EPS)
Accretion/dilution analysis evaluates whether an acquisition increases (accretive) or decreases (dilutive) the acquirer's pro forma earnings per share.
In a hostile takeover, a 'bear hug' is best described as:
Answer: A public letter to the target's board making an unsolicited high-premium offer and pressuring acceptance
A bear hug is an unsolicited offer letter sent to the target's board at a significant premium, making rejection politically difficult by implying shareholders would be harmed.
How this page was made: written with AI tools and published by Nathan Beja, founder of Practice Test Geeks, who is responsible for its content. Exam facts are checked against the official sources listed below. Not reviewed by a subject-matter expert. Editorial policy
Sources & references
Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy
- finra.org — Test delivery, test dates, score validity, eligibility · verified Oct 2026