Exam 21: Mergers Amcq Acquisitions Web Only

Bakers Mart just acquired Liver Works in a stock transaction.The combined firm has a postmerger value of $174,900.As independent firms,Bakers Mart was worth $106,800 and Liver Works was worth $61,100.How much synergy was created by the merger?

Which one of these is the best justification for acquiring a firm?

Which one of these statements is true?

Does diversification achieved through a merger create value? Why or why not?

The Green Fiddle has $48,000 of goodwill on its books as the result of the acquisition of The Blue Café.The acquisition has an estimated useful life of 25 years.If the acquisition were to be made today,the goodwill would be about $5,000 more than it was originally.What is the amount of goodwill amortization that needs to be deducted this year?

Staggered elections

Carlisle's Market has a market value of $789,000 while World's market value is $213,000.Carlisle's just acquired World for $225,000 cash.What is the net present value of the acquisition if the merger creates $26,000 of synergy from cost efficiencies?

Firm B has the option to purchase the key assets of Firm A at a predetermined fixed price should Firm A become the target in an unfriendly takeover attempt.Which term applies to the option given to Firm B?

Which one of these statements is correct?