Exam 23: Future Value of 1 at Compound Interest

A hostile merger is typically accomplished through

Holding companies simply are corporations that have voting control of one or more other corporations and the companies they control are often referred to as subsidiaries.

may result in expansion of operations in an existing product line and elimination of a competitor.

results from the combination of firms in the same line of business.

A vertical merger is a merger of two firms in the same line of business.

A vertical merger may result in expansion of operations in an existing product line and elimination of a competitor.

Business combinations are used by firms to externally expand in order to achieve all of the following objectives EXCEPT

A white knight is a takeover defense in which a firm issues securities that give their holders certain rights that become effective when a takeover is attempted and that make the target firm less desirable to a hostile acquirer.

Primary motives for merging include growth or diversification, synergy, fund raising, increased managerial skill or technology, tax considerations, increased ownership liquidity, and defense against takeovers.

The firm in a merger transaction that attempts to merge or takeover another company is called the

Primary motives for merging include growth or diversification, synergy, fund raising, increased managerial skill or technology, tax considerations, increased ownership liquidity, and defense against takeovers.

The synergy of mergers includes the economies of scale resulting from the merged firms' lower overhead.

Greater control over the acquisition of raw materials or the distribution of finished goods is an economic benefit of

In defending against a hostile takeover, the strategy that involves the target firm creating securities that give their holders certain rights that become effective when a takeover is attempted is called the strategy.

A conglomerate merger is a merger combining firms in unrelated businesses.

Firms' motives to merge include growth or diversification, synergy, fundraising, tax considerations, and defense against takeover.

A occurs when the operations of the acquiring and target firms are combined in order to achieve economies and thereby cause the performance of the merged firm to exceed that of the pre- merged firm.

Popular takeover defense methods include white knights, poison pills, greenmail and golden parachutes.

In defending against a hostile takeover, the strategy that involves the target firm finding a more suitable acquirer and prompting it to compete with the initial hostile acquirer to take over the firm is called the strategy.

A horizontal merger is a merger in which one firm acquires another firm in the same general industry but neither in the same line of business nor a supplier or customer.