Exam 18: Mergers and Acquisitions, and Business Failure

When a firm undertakes a merger in order to eliminate redundant functions or increase market share, this is an example of

A(n)__________ is undertaken with the goal of restructuring the acquired company in order to improve its cash flow and unlock its hidden value.

In defending against hostile takeover attempts, a company will include provisions in theemployment contracts of key executives that provide them with sizable compensation if the firm istaken over. This is called the __________strategy.

The main objective of the Bankruptcy and Insolvency Act is to ensure the firm is liquidated as quickly as possible

Poison pill is a takeover defense in which the target firm finds an acquirer more to its liking thanthe initial hostile acquirer and prompts the two to compete to take over the firm.

When the ratio of exchange in a merger is equal to one and both the acquiring and the target companies have the same premerger earnings per share, the merged firm's earnings per share will initially

Congeneric merger is a merger combining firms in unrelated businesses.

If the P/E paid is greater than the P/E of the acquiring company, on a postmerger basis the target firm's EPS increases and the acquiring firm's EPS decreases.

Which of the following is a common method used to pay for an acquisition?

The firm in a merger transaction that is being pursued as a takeover potential is called the

In defending against a hostile takeover, the strategy involving the payment of a large,debt?financed, cash dividend is the __________strategy.

Generally, a combination of two firms of unequal size is called

A friendly merger transaction is typically consummated through all of the following EXCEPT

All of the following are reasons for mergers EXCEPT

The overriding goal for merging is to

Cash acquisitions of going concerns are best analyzed using

Most firms seeking merger partners will hire the services of

A financial merger is undertaken to increase

A__________ is a method of structuring a financial merger, whereas a__________ involves the sale ofthe firm's assets.

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.