VCP5-DCV Sample Question

Question: 22

Which two conditions must exist on all hosts in the cluster if Enhanced vMotion Compatibility
(EVC) is used? (Choose two.)

A. The cluster must be enabled for DRS.
B. All hosts in the cluster must be running ESX/ESXi 3.5 Update 2 or later.
C. All hosts in the cluster must have hardware virtualization support enabled.
D. The cluster must be enabled for HA.

Answer: B,C

VMware: Back Into Buying Territory

• VMware's fourth-quarter beats were eclipsed by news that Dell could enter into a reverse merger with VMware, shattering hopes of a total buyout by Dell.

• Shares are down 6% on the news, especially as Dell reportedly plans to use VMware's strong cash flows to pay down its heavy EMC-related debt load.

• Dell already owns 82% of VMware through its purchase of EMC. VMware's stock has vacillated wildly over the past few months on hopes of a full Dell buyout.

• While deal variables are still major unknowns, the company's performance is still strong and VMware trades at cheap multiples of FCF.

• Dell's Q4 results included an acceleration in license revenues to 20% y/y growth and a >70% growth in free cash flow.

As usual, the reaction of investors to the news is frenetic and almost always exaggerated. Last month, news that Dell (NASDAQ: DVMT) could buy VMware (NASDAQ: VMW) sent the latter's stock quickly to over $ 150. This decision was irrational because it was unlikely Dell would pay a big premium for VMware, of which 82% already belong to you.

On March 1, however, Michael Dell envisioned a "reverse merger" in VMware that would fully integrate the two companies and give it access to VMware's strong cash flow to pay its massive $ 50,000. With Trump's tax bill limiting the amount of interest that companies can deduct to 30% of EBITDA, Dell is competing against the clock to reduce its huge debt load (in the last twelve months, Dell has paid one incredible amount of interest: $ 2.542 billion, which puts you in great danger of losing the total tax deductibility on that interest.Your TTM EBITDA was only $ 3.852 billion - see my previous analysis here). In addition, VMware has approximately $ 7.5 billion in net cash ($ 11.7 billion in cash and $ 4.2 billion in debt) to address Dell's debt for the acquisition. EMC. .

As a majority-owned company owned by Dell and its majority shareholder Michael Dell, VMware and its board have little to say about what will happen. But, as usual, investors' reflex reaction to the deal is likely to be overexploited, and equities should rise again to between $ 120 and $ 130 as more details of the deal are known.

Michael Dell Is Working On The Details of A Reverse-merger With VMware, And Here's What It Will Probably Look Like

Michael Dell and his advisors are starting to focus on the details of a reverse merger with VMware to reintegrate Dell technologies into the public market, although any final decision or agreement is more than a month away, say people close to Dell. the subject.

Dell and VMware are considering a stock exchange, which may or may not include money, that would allow Dell to access all of VMware's cash flow by merging the companies into a new publicly traded entity.

A Dell-VMware combination would also allow acquiring Dell tracking stock (ticker: DVMT) with a premium, people said, who asked not to be identified because the conversations are private. This transaction will probably also be complemented by an exchange of shares, trading the new company's shares against the tracker, people said.

Michael Dell is considering an agreement now in part because his server business is growing and the PC business is stable, said one of the people. Dell acquired EMC for $ 67 billion in the largest pure technology agreement that existed in 2015 and subsequently reduced the total consolidated debt by approximately $ 10 billion.

As a result, Michael Dell can get a fair valuation of the closed business at a particularly high price now, allowing it to retain more control over a Dell-VMware handset.

Dell and VMware both made public statements last month, highlighting Dell's assessment of possible "business opportunities," which include an initial public offering and a merger. Dell may also decide to maintain the status quo.

An initial public offering from Dell is not considered as strong as the reverse merger because it does not simplify Dell's capital structure, two people said.

Dell already has about 80% of VMware. While VMware, which manufactures virtualization software, should not allow public shareholders to vote on the deal, the board will consider adding a so-called "majority majority" vote to determine fairness, said one of the participants.

CNBC reported in January that Dell was considering a reverse merger with VMware, which would also allow Silver Lake private equity fund, co-investor with Michael Dell, to monetize its investment by selling shares in the public market.

The new tax laws of EE. UU They will also force Dell to deduct only 30% of the interest it pays on its $ 52.5 billion debt. Dell paid $ 2 billion last year in interest payments, which he was able to deduct from his taxes.