Question 1

A "takeover tender offer" describes the attempted purchase of a firm with the consent of that firm's management.

Accepted Answer

A) True 
 B)False

Question 2

Synergy is said to occur when the merged company is

Accepted Answer

A)  able to eliminate divisions that were doing the same tasks. 
B)  able to combine the marketing efforts of all merged companies. 
C)  able to get the employees from all merged companies to work towards one company goal. 
D)  all of the answers are correct. 
A)  able to eliminate divisions that were doing the same tasks. 
B)  able to combine the marketing efforts of all merged companies. 
C)  able to get the employees from all merged companies to work towards one company goal. 
D)  all of the answers are correct.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Selling stockholders generally receive a price below the current market value of their prior stock during a merger.

Accepted Answer

A) True 
 B)False

Question 5

An example of a horizontal merger would be

Accepted Answer

A)  Pepsi and Sears. 
B)  McDonald's and Pillsbury. 
C)  Pepsi and Frito Lay. 
D)  Coca-Cola and Dr Pepper. 
A)  Pepsi and Sears. 
B)  McDonald's and Pillsbury. 
C)  Pepsi and Frito Lay. 
D)  Coca-Cola and Dr Pepper.

Question 6

Goodwill is created when the purchasing firm pays more than what the acquired firm is worth.

Accepted Answer

A) True 
 B)False

A "takeover tender offer" describes the attempted purchase of a firm with the consent of that firm's management.

Synergy is said to occur when the merged company is

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

Selling stockholders generally receive a price below the current market value of their prior stock during a merger.

An example of a horizontal merger would be

Goodwill is created when the purchasing firm pays more than what the acquired firm is worth.

The Goals and Activities of Financial Management

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

Sources of Short-Term Financing

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Banking: Public and Private Placement

Long-Term Debt and Lease Financing

Common and Preferred Stock Financing

Dividend Policy and Retained Earnings

Convertibles, Warrants, and Derivatives

International Financial Management

Filters

Exam 20: External Growth Through Mergers

A "takeover tender offer" describes the attempted purchase of a firm with the consent of that firm's management.

Synergy is said to occur when the merged company is

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

Selling stockholders generally receive a price below the current market value of their prior stock during a merger.

An example of a horizontal merger would be

Goodwill is created when the purchasing firm pays more than what the acquired firm is worth.

The Goals and Activities of Financial Management

Review of Accounting

Financial Analysis

Financial Forecasting

Operating and Financial Leverage

Working Capital and the Financing Decision

Current Asset Management

Sources of Short-Term Financing

The Time Value of Money

Valuation and Rates of Return

Cost of Capital

The Capital Budgeting Decision

Risk and Capital Budgeting

Capital Markets

Investment Banking: Public and Private Placement

Long-Term Debt and Lease Financing

Common and Preferred Stock Financing

Dividend Policy and Retained Earnings

Convertibles, Warrants, and Derivatives

International Financial Management

Filters