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ii) advise the directors of a target company on the most appropriate defence if a specific offer is to be treated as hostile.[3]

4.

Financing acquisitions and mergers

a)

[3]

Compare the various sources of financing available for a proposed cash-based acquisition

b)

Evaluate the advantages and disadvantages of a financial offer for a given acquisition proposal using pure or mixed mode financing and recommend the most appropriate offer to be made.[3]

c)

Assess the impact of a given financial offer on the reported financial position and performance of the acquirer.[3]

D

CORPORATE RECONSTRUCTION AND RE- ORGANISATION

1.

Predicting corporate failure

a)

Assess the risk of corporate failure within the short to medium term using a range of appropriate financial evaluation methods (this will require an ability to use multivariate techniques such as the Z and Zeta score models).[3]

b)

Advise on the application of financial distress models to firms in emerging markets given local regulatory and financial market conditions.[3]

2.

Financial reconstruction

a)

Assess a company situation and determine whether a financial reconstruction is the most appropriate strategy for dealing with the problem as presented.[3]

b)

Assess the likely response of the capital market and/or individual suppliers of capital to any reconstruction scheme and the impact their response is likely to have upon the value of the firm.[3]

c)

Recommend a reconstruction scheme from a given business situation, justifying the proposal in terms of its impact upon the reported performance and financial position of the firm.[3]

3.

Business re-organisation

a)

Recommend, with reasons, strategies for unbundling parts of a quoted company.[3]

b)

Evaluate the likely financial and other benefits of unbundling.

[3]

c)

Advise on the financial issues relating to a management buy-out and buy-in.[3]

E

TREASURY AND ADVANCED RISK MANAGEMENT TECHNIQUES

  • 1.

    The role of the treasury function in multinationals

    • a)

      Describe the role of the money markets in:[1]

    • i)

      Providing short-term liquidity to industry and the public sector

    • ii)

      Providing short-term trade finance

    • iii)

      Allowing a multinational firm to manage its exposure to FOREX and interest rate risk.

  • b)

    Explain the role of the banks and other financial institutions in the operation of the money markets.[1]

  • c)

    Describe the characteristics and role of the principal money market instruments:[1]

    • i)

      Coupon bearing:

    • ii)

      Discount instruments

    • iii)

      Derivatives

  • d)

    Outline the role of the treasury management function within:[2]

    • i)

      The short term management of the firm’s financial resources

    • ii)

      The longer term maximisation of shareholder value

    • iii)

      The management of risk exposure

159

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