Question 1

A related acquisition involves two firms in the same industry.

Accepted Answer

A) True 
 B)False

Question 2

Private synergy

Accepted Answer

A)  occurs in most related acquisitions and allows firms to see increased returns. 
B)  is frequently achieved in conglomerates. 
C)  is not easy to understand and imitate. 
D)  is assessed by managers during the due diligence process. 
A)  occurs in most related acquisitions and allows firms to see increased returns. 
B)  is frequently achieved in conglomerates. 
C)  is not easy to understand and imitate. 
D)  is assessed by managers during the due diligence process.

Question 3

What are the attributes of a successful acquisition program?

Accepted Answer

Acquisitions can contribute to a firm's

Question 4

Typically, in a failed acquisition, the organization will

Accepted Answer

A)  restructure. 
B)  go into bankruptcy. 
C)  focus on building private synergy. 
D)  increase integration. 
A)  restructure. 
B)  go into bankruptcy. 
C)  focus on building private synergy. 
D)  increase integration.

Question 5

It has been found that both U.S. and Japanese firms engaging in downsizing activities achieve lower returns after downsizing.

Accepted Answer

A) True 
 B)False

Question 6

High levels of unrelated diversification will have a positive effect on a firm's long-term performance if managers focus on financial controls.

Accepted Answer

A) True 
 B)False

Question 7

Private synergies exist between a potential acquisition target and all firms seeking to acquire it.

Accepted Answer

A) True 
 B)False

Question 8

In a merger

Accepted Answer

A)  one firm buys controlling interest in another firm. 
B)  two firms agree to integrate their operations on a relatively coequal basis. 
C)  two firms combine to create a third separate entity. 
D)  one firm breaks into two firms. 
A)  one firm buys controlling interest in another firm. 
B)  two firms agree to integrate their operations on a relatively coequal basis. 
C)  two firms combine to create a third separate entity. 
D)  one firm breaks into two firms.

Question 9

Ambrose is a scientist working for a pharmaceutical company. His company was acquired by a rival pharmaceutical company, and now it is involved in downsizing and downscoping. Ambrose is concerned about his job security, since he is actively involved in amateur sports in his community and does not wish to disrupt his current lifestyle. Ambrose's job will be most likely to be secure if

Accepted Answer

A)  Ambrose's research is in a non-core activity. 
B)  the acquisition has been financed by junk bonds. 
C)  Ambrose is in a position to take a poison pill. 
D)  Ambrose is a key employee in the firm's primary business. 
A)  Ambrose's research is in a non-core activity. 
B)  the acquisition has been financed by junk bonds. 
C)  Ambrose is in a position to take a poison pill. 
D)  Ambrose is a key employee in the firm's primary business.

Question 10

The outcome of downsizing, downscoping, and leveraged buyouts is higher performance.

Accepted Answer

A) True 
 B)False

Question 11

What are the differences between downscoping and downsizing?

Accepted Answer

Downsizing is a reduction in the number

Question 12

Among Fortune 1000 firms, downsizing is

Accepted Answer

A)  very rare, fewer than 10% of firms have used it. 
B)  uncommon, between 10 and 20% of firms have used it. 
C)  common, between 40 and 60% of firms have used it. 
D)  very common, over 80% of firms have used it. 
A)  very rare, fewer than 10% of firms have used it. 
B)  uncommon, between 10 and 20% of firms have used it. 
C)  common, between 40 and 60% of firms have used it. 
D)  very common, over 80% of firms have used it.

Question 13

Typical returns on acquisitions for acquiring firms are close to zero.

Accepted Answer

A) True 
 B)False

Question 14

Firms use downsizing as a restructuring strategy for different reasons, but the major tactical reason is

Accepted Answer

A)  poor unit performance from decreasing industry attractiveness. 
B)  decreasing market share from increasing industry competition. 
C)  shifting industry characteristics. 
D)  the desire to lower labor costs. 
A)  poor unit performance from decreasing industry attractiveness. 
B)  decreasing market share from increasing industry competition. 
C)  shifting industry characteristics. 
D)  the desire to lower labor costs.

Question 15

After a leveraged buyout, ____ typically occur(s).

Accepted Answer

A)  selling off of assets 
B)  further rounds of acquisitions 
C)  due diligence 
D)  private synergy 
A)  selling off of assets 
B)  further rounds of acquisitions 
C)  due diligence 
D)  private synergy

Question 16

Describe the seven problems in achieving a successful acquisition.

Accepted Answer

Acquisition strategies present many pote

Question 17

The lower the barriers to entry, the more likely firms will use acquisition as a means to enter a market.

Accepted Answer

A) True 
 B)False

Question 18

A(an) ____ occurs when one firm buys a controlling, or 100% interest, in another firm.

Accepted Answer

A)  merger 
B)  acquisition 
C)  spin-off 
D)  restructuring 
A)  merger 
B)  acquisition 
C)  spin-off 
D)  restructuring

Question 19

Due diligence includes all of the following activities EXCEPT assessing

Accepted Answer

A)  differences in firm cultures. 
B)  tax consequences of the acquisition. 
C)  the level of private synergy between the two firms. 
D)  the appropriate purchase price. 
A)  differences in firm cultures. 
B)  tax consequences of the acquisition. 
C)  the level of private synergy between the two firms. 
D)  the appropriate purchase price.

A related acquisition involves two firms in the same industry.

Private synergy

What are the attributes of a successful acquisition program?

Typically, in a failed acquisition, the organization will

It has been found that both U.S. and Japanese firms engaging in downsizing activities achieve lower returns after downsizing.

High levels of unrelated diversification will have a positive effect on a firm's long-term performance if managers focus on financial controls.

Private synergies exist between a potential acquisition target and all firms seeking to acquire it.

In a merger

The outcome of downsizing, downscoping, and leveraged buyouts is higher performance.

What are the differences between downscoping and downsizing?

Among Fortune 1000 firms, downsizing is

Typical returns on acquisitions for acquiring firms are close to zero.

Firms use downsizing as a restructuring strategy for different reasons, but the major tactical reason is

After a leveraged buyout, ____ typically occur(s).

Describe the seven problems in achieving a successful acquisition.

The lower the barriers to entry, the more likely firms will use acquisition as a means to enter a market.

A(an) ____ occurs when one firm buys a controlling, or 100% interest, in another firm.

Due diligence includes all of the following activities EXCEPT assessing

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

International Strategy

Cooperative Strategy

Corporate Governance

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters

Exam 7: Acquisition and Restructuring Strategies

A related acquisition involves two firms in the same industry.

Private synergy

What are the attributes of a successful acquisition program?

Typically, in a failed acquisition, the organization will

It has been found that both U.S. and Japanese firms engaging in downsizing activities achieve lower returns after downsizing.

High levels of unrelated diversification will have a positive effect on a firm's long-term performance if managers focus on financial controls.

Private synergies exist between a potential acquisition target and all firms seeking to acquire it.

In a merger

The outcome of downsizing, downscoping, and leveraged buyouts is higher performance.

What are the differences between downscoping and downsizing?

Among Fortune 1000 firms, downsizing is

Typical returns on acquisitions for acquiring firms are close to zero.

Firms use downsizing as a restructuring strategy for different reasons, but the major tactical reason is

After a leveraged buyout, ____ typically occur(s).

Describe the seven problems in achieving a successful acquisition.

The lower the barriers to entry, the more likely firms will use acquisition as a means to enter a market.

A(an) ____ occurs when one firm buys a controlling, or 100% interest, in another firm.

Due diligence includes all of the following activities EXCEPT assessing

Strategic Management and Strategic Competitiveness

The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis

The Internal Organization: Resources, Capabilities, Core Competencies, and Competitive Advantages

Business-Level Strategy

Competitive Rivalry and Competitive Dynamics

Corporate-Level Strategy

International Strategy

Cooperative Strategy

Corporate Governance

Organizational Structure and Controls

Strategic Leadership

Strategic Entrepreneurship

Filters