ICMA Exam FMFQ Topic 3 Question 56 Discussion

Actual exam question for ICMA's FMFQ exam

Question #: 56
Topic #: 3

[All FMFQ Questions]

A company's share price fall below its net asset value. The company is then the subject of a takeover after which rather than being run as a going concern it is broken up and its assets sold to achieve maximum value. This is an example of which of the following strategies?

ALeveraged investment

BAsset stripping

CMergers & Acquisitions

DLeveraged buyout

Show Suggested Answer

Suggested Answer: D

by Ernest at May 07, 2024, 10:18 AM

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Emelda

16 days ago

Asset stripping, definitely. The company's being gutted and its parts sold off. Seems like a pretty ruthless strategy to me.

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Gianna

2 days ago

A) Leveraged investment

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Lauryn

22 days ago

Asset stripping for sure. The company is being broken up and its assets sold off to the highest bidder. Not very friendly for the employees, I imagine.

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Dexter

26 days ago

This is a classic case of asset stripping. The company is being taken over and its assets sold off, rather than being kept running.

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Karan

1 months ago

I'd go with 'B' - asset stripping. The company is being broken up and its assets sold, rather than being kept as a going concern.

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Bernadine

9 days ago

I think you're right, it does sound like asset stripping.

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Dorothy

22 days ago

I think you're right, it does sound like asset stripping.

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Roy

1 months ago

Asset stripping seems like the obvious choice here. The company's assets are being sold off to maximize value, rather than being run as a going concern.

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