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A Practical Guide to Mergers, Acquisitions, and Divestitures - v10 (Course Id 893)

QAS / Registry
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Author : Jae K. Shim, Ph.D., CPA
Course Length : Pages: 71 ||| Review Questions: 36 ||| Final Exam Questions: 28
CPE Credits : 5.5
IRS Credits : 0
Price : $49.45
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry
Primary Subject-Field Of Study:

Finance - Finance for Course Id 893

Description :

This course discusses all facets of mergers and acquisitions (M&As) and divestitures, including deciding on terms, key factors to consider, pros and cons, types of arrangements, evaluative criteria, valuation methods, financial effects of a merger, holding companies, takeover bids, SEC filing requirements, accounting and reporting requirements for business combinations, and financial analysis of combinations. Also addressed is emergence of corporate development officers (CDOs). 

Usage Rank : 0
Release : 2020
Version : 1.0
Prerequisites : Basic Accounting.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 28-Jan-2021
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - Technical - NASBA Registry - 893

Keywords : Finance, Practical, Guide, Mergers, Acquisitions, Divestitures, v10, cpe, cpa, online course
Learning Objectives :

Chapter 1
Mergers and Acquisitions

After studying this chapter, you will be able to:
    1. Identify the characteristics of mergers and the different types of mergers.
    2. Recognize the benefits of mergers and why certain companies may choose an acquisition strategy.
    3. Recognize the definition of due diligence when considering a merger.
    4. Understand how different mergers may affect taxation and financial results.
    5. Recognize antitrust guidelines used to determine whether certain mergers would be challenged by the Department of Justice.
    6. Identify factors relevant to the stock acquisition of another company.
    7. Recognize Securities and Exchange Commission (SEC) rules regarding mergers.
    8. Identify advantages of different methods of financing a merger.
    9. Recognize different defensive measures used by target companies.
    10. Identify different approaches and techniques for merger valuation.

Chapter 2

After studying this chapter, you will be able to:
    1. Identify the objectives and types of divestitures, and some reasons for divesting business units.
    2. Recognize some of the methods a company may use to divest.
    3. Identify valuation techniques for divestitures.
Course Contents :

Chapter 1:    Mergers and Acquisitions

Learning Objectives


Chapter 1 Review Questions - Section 1

Pros and Cons of a Merger

Advantages of a Merger

Disadvantages of a Merger


Chapter 1 Review Questions - Section 2

Planning for Mergers and Acquisitions

Defining Objectives

Defining Criteria

Finding and Screening Candidates

Deciding on Acquisition Terms



Market Price of Stock

Book Value per Share

Net Working Capital per Share

Grading Criteria

Illustrative Grading Guide:

Factors in Determining a Price

Acquisition Strategy and Process

Financing the Merger

Advantages of Giving Stock

Disadvantages of Giving Stock

Advantages of Giving Assets

Disadvantages of Giving Assets

Advantages of Leverage

Disadvantages of Leverage

Preferred Stock Financing

Chapter 1 Review Questions - Section 3

The Use of Capital Budgeting Techniques in Appraising the Acquisition

Exchange Ratio

Effect of Merger on Earnings per Share and Market Price per Share

Risk of the Acquisition

Holding Company

Advantages of a Holding Company

Disadvantages of a Holding Company

Hostile Takeover Bids

Advantages of a Hostile Bid

Disadvantages of a Hostile Bid

Tax Considerations

Defensive Measures by Targeted Company

Chapter 1 Review Questions - Section 4

The Valuation of a Targeted Company

Comparison with Industry Averages

Capitalization of Earnings

Capitalization of Excess Earnings

Capitalization of Cash Flow

Present Value (Discounting) of Future Cash Flows

Operating Cash Flow

Book Value (Net Worth)

Tangible Net Worth

Economic Net Worth (Adjusted Book Value)

Fair Market Value of Net Assets

Liquidation Value

Replacement Cost

Secured-Loan Value

Gross Revenue Multiplier

Profit Margin/Capitalization Rate

Price-Earnings Factor

Comparative Values of Similar Going Concerns

Sales of Stock

Combination of Methods

Accounting Adjustments

Q ratio


Accounting, Reporting and Disclosures for Business Combinations


The Application of the Acquisition Method

Acquisition Method vs. Purchase Method


Financial Statement Analysis of Business Combination

Emergence of Corporate Development Officers (CDOs) and In-House M&A Teams

Making a Corporate Marriage Work

Chapter 1 Review Questions - Section 5

Chapter 2:    Divestiture

Learning Objectives


Objectives and Types of Divestitures

Reasons for Divestiture

Determining What Areas/Units Should be Sold

Divestiture or Restructuring Planning

Planning the Sale

Chapter 2 Review Questions - Section 1

Employee Considerations

Means of Divestiture

Valuation and Appraisal in Divestiture

Asset Valuation Methods

Sales and Income Factors

Market Based Comparisons

Discounted Cash Flow Analysis

An Illustration: Discounted Cash Flow Analysis

Divestiture with Uncertainty

Risk Adjusted Discount Rate

Sensitivity Analysis


Choosing the Form of the Transaction

Cash versus “Paper”

Installment Sales

Contingent Earnout Arrangements

Leveraged Buyouts (LBO)

Regulated Investment Company Technique


ESOP Techniques

Partial Sale Transactions

Accounting for Divestitures

Reporting the Disposal of a Segment of a Business

Dispositions in Form Only

Disclosure Requirements

Subsidiaries Sold to the Public or Spun Off (Carveout Accounting)

Liquidation Process


Chapter 2 Review Questions - Section 2


Table 1 - Present Value of $1

Table 2 - Present Value of an Annuity of $1

Due Diligence Checklist

Annual Report References

Microsoft 10-Q 01/26/2017

Amazon 2017 Annual Report


CPE Finance Course: https://www.cpethink.com/cpe-for-cpas
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