Exam 7: Acquisition and Restructuring Strategies

Evidence suggests that firms using acquisitions as a substitute for internally developed innovations:

Despite relaxed regulations, the amount of cross-border acquisition activity between nations within the European Union is on the decline.

The expenses incurred by firms trying to create private synergy through acquisition are called:

Research has shown that maintaining a low or moderate level of firm debt is critical to the success of an acquisition, except when substantial leverage was used to finance the acquisition itself.

A firm's restructuring strategy is often driven by:

Because of additional information processing, firms using an unrelated diversification strategy often become overdiversified compared to firms adopting a related diversification strategy.

Acquisitions intended to increase market power are not subject to regulatory review, but they are subject to analysis by financial markets.

Synergies can involve the ________ assets of the firm.

Most acquisitions that are designed to achieve greater market power entail buying a competitor, a supplier, a distributor or a business in a highly related industry.

Barriers to entry represent factors associated with:

One problem with firms becoming too large is that they:

An acquisition of a firm in a highly related industry is referred to as a horizontal acquisition.

Identify and explain the seven reasons firms engage in an acquisition strategy.

Which one of the following is not a restructuring strategy?

A friendly acquisition:

In the long run, entering new markets with internally developed products can be less risky than entering through acquisition, especially if the latter becomes a substitute for:

Downscoping represents a reduction in the number of a firm's employees and sometimes in the number of its operating units, but it may or may not represent a change in the composition of businesses in the firm's portfolio.