Exam 20: External Growth Through Mergers

Mergers often improve the financing flexibility that a larger company has available.

Leveraged buyouts are restricted to "outside" tender offers.

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Antitrust policy can preclude the acquisition of a competitor.

In a horizontal merger, the integration that occurs comes from acquiring companies that supply resources to the company's production process.

The two step buy-out procedure induces stockholders to delay their reaction to the offer, since they will receive a higher price later.

Selling stockholders who are offered cash or another company's stock in a merger may be willing to part with the shares they hold because

A business combination of two or more companies in which the resulting firm maintains the identity of the acquiring company is defined as a

A takeover tender offer lets a company attempt to acquire a target firm against its will.

Which of the following is not a motive for selling by the stockholder's of the acquired company?

Which of the following terms is not specifically related to an unfriendly buyout?

Which of the following is a tender offer that utilizes borrowed funds and the acquired firm's assets as collateral?

Selling stockholders are often anxious to sell because of the potential of higher profits.

A Tender Offer describes the attempted purchase of a firm with the consent of that firm's management.

A cash purchase is similar to a capital budgeting decision.

Selling stockholders may receive a price well above current market or book value.

While a horizontal merger may improve profitability, it will not necessarily reduce the portfolio risk of the acquiring company.

Dilution in earnings per share occurs when a company with

Existing management of a firm is almost always ready to accept an offer for the purchase of the firm at a price above the market.

The two step buy-out procedure allows the acquiring firm to pay a lower total price than if a single offer is made.