AFX3781

Corporate takeovers and insolvency

Mr Lawrence Webb

6 points · 3 hours per week · First, second semester · Caulfield · Prerequisites: AFX2491

Objectives On completion of this subject students should be able to recognise the economic benefits and costs of mergers and acquisitions; apply the major value principles of price earnings multiples, discounted cash flow and asset backing; understand the legal requirements of mergers and acquisitions. In respect of insolvencies, students should be able to understand the law and practice of insolvency; understand causes and avoidance of corporate failure; apply predictive models of corporate failure and appreciate the failure pathway through case study approach.

Synopsis Takeovers - the acquisition and sale process; valuation (I) and (II); legal requirements in respect of mergers and acquisitions; evaluation of targets; insolvencies - social and economic costs of failure; law of insolvency; prediction of the company at risk; causes of failure; avoidance of failure; case studies of corporate failure.

Assessment Case studies: 30% · Examination (3 hours): 70%

Prescribed texts

Australian corporation and securities legislation latest edition
Lonegan W The valuation of businesses and shares and other equity Longman Cheshire, 1992
Official listing rules Australian Stock Exchange Ltd, 1994
Tomasic R Australian corporate insolvency law Butterworths, 1997

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