Reading 16

Corporate Restructuring

3 modules 18 min
0/3

Exam Focus

For this reading, pay attention to the various types of restructurings, the motivations behind them, and their impacts on company value. The perspective here is that of an investment analyst seeking to identify the effect of an announced restructuring on company value. This reading is mostly qualitative: there is lots of terminology, and very little computation.

Modules

  1. Module 16.1Restructuring Types and MotivationsExplain types of corporate restructurings and issuers’ motivations for pursuing them. · Explain the initial evaluation of a corporate restructuring.8 min · 2 LOS
  2. Module 16.2ValuationDemonstrate valuation methods for, and interpret valuations of, companies involved in corporate restructurings. · Demonstrate how corporate restructurings affect an issuer’s EPS, net debt to EBITDA ratio, and weighted average cost of capital.4 min · 2 LOS
  3. Module 16.3EvaluationEvaluate corporate investment actions, including equity investments, joint ventures, and acquisitions. · Evaluate corporate divestment actions, including sales and spin offs. · Evaluate cost and balance sheet restructurings.6 min · 3 LOS
Practice quiz11 questions on this reading