Exam 9: Diversifying, Acquiring, and Restructuring

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Compared with acquisitions, alliances cost less and allow for opportunities to learn from working with each other before engaging in full-blown acquisitions.

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Which would be more characteristic of conglomerates?

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In reality, the need for flexible diversification strategies is because of the static nature of:

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In addition to product relatedness as a factor when considering acquisitions, relatedness can come in the form of:

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The scope of the firm is thus determined by a comparison between MEB and MBC.

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When conglomerate units are better off competing as stand-alone entities, we call it diversification premium.

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Which of the following motives for M&A does NOT necessarily increase shareholder value?

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Other comments you saw in the blog are less hostile to business. In one, the person was claiming that recent developments in financial markets suggest that it is time to revive the use of conglomerates. Based on what is happening now, do you agree? Why or why not?

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Not all product-related diversifiers outperform product-unrelated diversifiers.

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Answering why firms choose different diversification strategies does not help answer why firms differ and how they behave.

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Which of the following is true of relatedness?

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Diversification premium is the same thing as:

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In the United States between the 1950s and 1970s MEB decreased, resulting in a decreased scope of the firm into conglomeration.

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A classic conglomerate is characterized by:

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In an acquisition, shareholders of the acquiring firm typically see a greater increase in stock value than do shareholders of the target firm.

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The most straightforward motivation for a firm to diversify is growth opportunities in an industry.

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To add maximum value, a product-related diversifier needs to:

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Among the following synergistic motives for M&As, which is a resource-based consideration?

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Which of the following managerial motives for conglomerations benefits shareholders?

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Horizontal and vertical M&As are typically involve product-related diversification.

(True/False)
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